Question 6

Question:

On which three basic accounting statements would you find depreciation?

Answer:

Depreciation is recorded is on the income statement as an expense. It is singled out because it is an expense that the firm pays to itself.

Then, on the cash flow statement in cash from operations as a source of cash. Remember that depreciation is just a way of spreading out an asset purchase over time and that you already paid for the asset.

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