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    how depreciation generates actual cash flows

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    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)

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    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 ...