Which of the Following Statements About Depreciation Is Correct

question 106

Multiple Choice

Which of the following statements about depreciation is correct?

• A)depreciation is subtracted from cost of goods sold to calculate net income.
• B)when depreciation expense is incurred, cash balances are reduced.
• C)depreciation expense does not affect net income.
• D)depreciation reduces the book value of assets.

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Definitions:

Operating Costs

Operating Costs are the expenses associated with the day-to-day functionalities of a business, excluding costs related to production.