The effect on profit and cash of depreciating a non-current asset is:

Name: The effect on profit and cash of depreciating a non-current asset is:
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Question

Quizplus · Accepted Answer

Depreciation is a non-cash expense, which means it does not directly affect cash flow. However, it decreases the reported profit for the period since it is an expense that reduces revenue. Therefore, the correct answer is that depreciating a non-current asset leads to a decrease in profit and no effect on cash.

The Effect on Profit and Cash of Depreciating a Non-Current