Trainer Ltd is trying to decide whether to change from the reducing balance method of depreciation to the straight-line method for both accounting and tax purposes. Using the reducing balance method at the rate allowable for taxation purposes, the expense would be $1 020 000. If it changed to the straight-line method, depreciation expense would be $680 000. If the straight-line method were used instead of the reducing balance method, what would be the effect on the following?
-Cash from operations:

Question

Quizplus · Accepted Answer

Depreciation is a non-cash expense, so changing the method of depreciation does not affect cash from operations.

Trainer Ltd Is Trying to Decide Whether to Change from the Reducing