Question: 1 . Currently Art is charged $ 1 , 9 3 0 , 9 3 3 depreciation on the income statement of Andrews. Andrew planning
Currently Art is charged $ depreciation on the income statement of Andrews. Andrew planning for an increase in this depreciation on the Financial Statement of Andrews will this?
a Decrease net cash from operations on the cash flow statement.
b Increase net cash from operations on the cash flow statement.
c Have no impact on the net cash from operations previous depreciation.
d Just impact the balanced sheet.
Depreciation and Cash Flow:
Answers are as following which option is correct
Impact:c Have no impact on the net cash from operations on the cash flow statement.
Reasoning: Depreciation is a noncash expense. It reflects the allocation of an asset's cost over its useful life. While it reduces net income on the income statement, it doesn't involve any cash outflow. Cash flow statements track actual cash movements, so depreciation adjustments wouldn't affect net cash from operations.
Option c is correct
Increase net cash from operations on the cash flow statement. because the increase in operating cash flow is the tax shield on depreciation due to which the net income increases Income Statement
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