Recording Depreciation Expense Does Which of the Following

question 56

Multiple Choice

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.

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Definitions:

Budget Committee

A group responsible for developing and monitoring an organization's financial plan, including income and expenditures.

Management's Budgeting Goals

The financial and operational targets set by a company's management during the budgeting process.

Accounting Department

The division within a company that is responsible for managing financial transactions, records, and statements.

Service Firm

A business that provides intangible products or services to consumers or other businesses rather than physical goods.