What Is a Noncash Expense

question 1

Multiple Choice

What is a Noncash expense?

• A) An expense item that a company purchases on credit to be paid later
• B) An expense item that can be written off income tax because no cash is paid because of it
• C) A liability such as unearned revenue that the company has to perform services to earn
• D) An item such as interest expense from financing

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Definitions:

Straight-Line Depreciation

A method of allocating an asset's cost evenly over its useful life.

Initial Investments

The initial amount of money invested in a project, asset, or company to start operations or purchase assets.

Income Taxes

Taxes imposed by the government on the income generated by individuals and businesses.

Capital Budgeting

The process of planning and managing a company's investments in major projects or assets with long-term implications.