On a company's statement of cash flows, depreciation is ________.
A)the difference between the total sources available to the owner and the total uses of those assets
B)listed as a source of funds because it is a noncash expense, already deducted as a cost of doing business
C)the owner's total investment at the company's inception plus retained earnings
D)creditors' total claims against the firm's assets

Question

Quizplus · Accepted Answer

Depreciation is listed as a source of funds because it is a noncash expense, already deducted as a cost of doing business. It does not involve any actual cash outflow, but reduces the value of an asset over time, which is why it is treated as an expense.

On a Company's Statement of Cash Flows, Depreciation Is ________