Question :
Depreciation is a __________.
Option 1:
Cash expenditure
Option 2:
Cash operating expense
Option 3:
Non- cash non-operating expense
Option 4:
Non-cash operating expense
Answer (1)
7th Jan, 2024
Correct Answer:
Non-cash operating expense
Solution : A fixed asset's book value gradually decreases as a result of depreciation. It is based on the asset's acquisition cost rather than its market worth. Since it is the process of writing off the already incurred capital investment, it does not represent a cash outflow.
Hence rhe Correct answer is option 4.
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