In cash budgeting, the impact of depreciation is reflected in a reduction in tax payments.

Name: In cash budgeting, the impact of depreciation is reflected in a reduction in tax payments.
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Quizplus · Accepted Answer

Depreciation is a non-cash expense, which means it does not involve any cash outflow. As such, it reduces the taxable income of a business and lowers the amount of income tax that the business has to pay. This is reflected in the cash budget as a reduction in tax payments.

In Cash Budgeting, the Impact of Depreciation Is Reflected in a Reduction