Depreciation expense reduces operating income but does not require the use of cash.

Name: Depreciation expense reduces operating income but does not require the use of cash.
Brand: Quizplus
Rating: 5.0 (38 reviews)

Question

Quizplus · Accepted Answer

Depreciation expense is a non-cash expense, meaning it does not involve a cash outflow. It is a way of allocating the cost of an asset over its useful life. While it reduces operating income, it does not reduce cash flow from operations.

Depreciation Expense Reduces Operating Income but Does Not Require the Use