ECONOMICS

COST ACCOUNTING

CAPITAL BUDGETING

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Depreciation is included as a cash flow
A
True
B
False
Explanation: 

Detailed explanation-1: -This statement is false. Depreciation is a non cash accounting charge and does not have a direct impact on the amount of cash flow generated by a company.

Detailed explanation-2: -Depreciation in cash flow statement Depreciation is a non-cash expense, which means that it needs to be added back to the cash flow statement in the operating activities section, alongside other expenses such as amortization and depletion.

Detailed explanation-3: -Depreciation is a non-cash expense and does not result in any cash outflow.

Detailed explanation-4: -Depreciation is regarded as a non-cash expense.

Detailed explanation-5: -Depreciation is considered a non-cash expense, since it is simply an ongoing charge to the carrying amount of a fixed asset, designed to reduce the recorded cost of the asset over its useful life.

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