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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


Team Careers360 2nd Jan, 2024
Answer (1)
Team Careers360 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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