Depreciation: Impact on Financial Statements

It has no impact on the financial statements

It decreases the cash flow from operating activities

It decreases the total assets (correct)

It increases the net income

The increase in the value of an asset over time

The decrease in the value of an asset over time due to wear and tear, obsolescence, or other similar factors (correct)

The process of setting aside money to replace an asset at the end of its useful life

The process of liquidating an asset to generate cash flow

Because it directly reduces the company's cash reserves

Because it increases the company's cash balance

Because it involves actual cash outflows

Because it doesn't impact the cash flows of a company (correct)