Asked by Emmanuella Dickson on May 09, 2024
Verified
Although depreciation is a noncash expense, the government still allows the deduction on the firm's tax return.
Depreciation
A method of allocating the cost of a tangible asset over its useful life.
Noncash Expense
Expenses recorded on an income statement that do not involve a direct cash outflow, such as depreciation or amortization.
- Understand the classification and consequences of assorted accounting techniques and concepts on financial statements.
Verified Answer
JW
Julianna WelkerMay 12, 2024
Final Answer :
True
Explanation :
Even though depreciation is a noncash expense, it is still allowed as a deduction on the firm's tax return because it represents a decrease in the value of the company's assets over time.
Learning Objectives
- Understand the classification and consequences of assorted accounting techniques and concepts on financial statements.