Depreciation expense:
A) reduces both taxes and net income.
B) increases net fixed assets as shown on the balance sheet.
C) is a noncash item that increases net income.
D) decreases current assets,net income,and operating cash flows.

Question

Quizplus · Accepted Answer

Depreciation expense reduces net income because it is an expense recorded on the income statement. Since net income is lower, the taxes a company owes will also be lower, as taxes are calculated based on profits.

Depreciation Expense