Question : Depreciation charged by a Company will result in inflow, outflow or no flow of Cash.
Option 1: Inflow of cash
Option 2: Outflow of cash
Option 3: No flow of cash
Option 4: Cash and cash equivalents
Answer (1)
16th Jan, 2024
Correct Answer: No flow of cash
Solution : Answer = No flow of cash
When depreciation is charged on fixed assets by the company will be no flow of cash because depreciation is a Non-cash item. Depreciation charged by a company does not involve any actual cash movement; it represents the allocation of the cost of an asset over its useful life for accounting purposes.
Hence, the correct option is 1.
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