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Depreciation is an operating expense but does not involve any cash flow.
like salaries,rent insurance etc it is included in the P/L accounts.It is considered as operating because machinery/equipments or any property diminishes its value day by day.
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∙ 12y ago
Wiki User
∙ 9y agoYes depreciation is an operating expense because depreciation is charged due to usage of assets in operations and taking part in generating revenue and if there is no operations then there is no need to utilization of asset and then there is no depreciation expense as well.
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∙ 13y agoNo it is not an operating expense, accumulated depreciation is a contra asset account on the balance sheet. Accumulated depreciation is netted against your fixed assets on the face of the financial statements to result in net fixed assets. Depreciation (expense) would be classified as an operating expense. The journal entry is:
Dr. Depreciation (income statement, op. exp.)
Cr. Accumulated Depreciation (balance sheet)
Accumulated depreciation "accumulates" on the balance sheet and is generally only relieved through the disposal of an asset.
Wiki User
∙ 9y agoYes depreciation is an operating expense because depreciation is charged due to usage of assets in operations and taking part in generating revenue and if there is no operations then there is no need to utilization of asset and then there is no depreciation expense as well.
Wiki User
∙ 13y agoYes; depreciation is considered to be an operating expense.
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Is depreciation a non operating expense?
28.04.2012 depreciation is part of operating expenses Popoola
What is kind of operating expense is depreciation selling expense or general administrative expense?
Examples of operating expense ==> depreciation expense of a machine, impairment of goodwill Example of selling expense ==> advertising Example of general administrative expense ==> office expense
Does office depreciation expense go on income statement?
yes, under operating expenses
When using the Indirect Method how is depreciation expense recorded on the Statement of Cash Flows?
Operating Activity
Is depreciation expense an asset or liability?
Depreciation expense is neither an asset or liability. It is an expense.
Is depreciation expenses a non-cash expense?
is depreciation expense a non-cash expense
How does depreciation affect?
Indirectly. Technically it doesn't, depreciation is a non-cash expense. Depreciation expense does, however show up as a line item on the cash flows statement as an adjustment to operating income to derive net cash from operations... you add it back to income.
How does depreciation affect cashflow?
Indirectly. Technically it doesn't, depreciation is a non-cash expense. Depreciation expense does, however show up as a line item on the cash flows statement as an adjustment to operating income to derive net cash from operations... you add it back to income.
Is the Depreciation a loss or an Expense?
An expense.
Accumulated depreciation and depreciation expense?
Using accumulated depreciation and depreciation expense is a way that businesses can realize the true value of assets. A piece of equipment, for example, is devalued every year by the process of amortizing the asset. This in turn is recorded as depreciation and depreciation expense.
Does a depreciation expense increase or decrease cash flow?
Neither. Depreciation is a non-cash expense.
The journal entry to record depreciation expense consists of a credit to Accumulated Depreciation and a debit to the asset being depreciated?
Debit is to depreciation expense.
