Since depreciation and other noncash charges represent a scheduled write-off of an earlier cash outflow, they should not be included in the cash budget.

Question

Quizplus · Accepted Answer

Depreciation and other noncash charges do not involve an actual cash outflow in the current period, as they represent a write-off of past investments in long-term assets. Therefore, they should not be included in the cash budget, which focuses on estimating future inflows and outflows of cash.

Since Depreciation and Other Noncash Charges Represent a Scheduled Write-Off