Depreciation Is a Source of Cash Inflow Because

question 8

Multiple Choice

Depreciation is a source of cash inflow because

• A) it is a tax-deductible non-cash expense.
• B) it supplies cash for future asset purchases.
• C) it is a tax-deductible cash expense.
• D) it is a taxable expense.

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Definitions:

Recorded

The process of documenting business transactions in the accounting records.

Incoming Partner

An individual who is joining a partnership, often contributing capital or other resources to the business.

Terminated

The act of bringing something to an end or the state of being brought to an end; in employment, it refers to the discontinuation of a person's employment.

Turned into Cash

The process of converting assets or investments into liquid funds or cash.