how depreciation generates actual cash flows
Not what you're looking for?
Explain how depreciation generates actual cash flows for the company.
In addition, what is the difference between accumulated depreciation and depreciation expense? How are they related?
(Please reply in your own words if possible, thanks)
Purchase this Solution
Solution Preview
Accumulated depreciation refers to the total amount of depreciation that has accumulated over the life of the asset. Depreciation expense refers to the amount of depreciation related to the specific period. When recording the two items, it will always appear as follows:
Debit: Depreciation Expense
Credit: Accumulated Depreciation
Here is some additional info on the topic for your reference:
A company needs to report depreciation accurately in its financial statements in order to achieve two main objectives. Firstly, to match its expenses with the ...
Purchase this Solution
Free BrainMass Quizzes
IPOs
This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)
Paradigms and Frameworks of Management Research
This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.
Accounting: Statement of Cash flows
This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.
Lean your Process
This quiz will help you understand the basic concepts of Lean.
Understanding the Accounting Equation
These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.