Recording depreciation expense does which of the following?
A)It reduces both profit and the amount of cash generated by a company.
B)It does not affect profit or the amount of cash generated by a company.
C)It reduces profit and increases the amount of cash generated by a company.
D)It reduces profit but does not affect the amount of cash generated by a company.

Question

Quizplus · Accepted Answer

Recording depreciation expense reduces the profit of a company as it is an expense, but it does not affect the amount of cash generated by the company since it is a non-cash expense. Depreciation expense records the decrease in value of an asset over time and is used to allocate the cost of an asset over its useful life.

Recording Depreciation Expense Does Which of the Following