Is Depreciation a source of fund
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Answer / ss
No, as depriciation is the wear and tear of the asset and
is sunk cost can not be part of source of funds.
| Is This Answer Correct ? | 17 Yes | 4 No |
Answer / kumaraswamy
no, depreciation is not a source of fund. it is a provision
from the profit of the company. it is a sacrifice of the
profit.once the asset value becomes "zero" after
depreciation is sprovided for, the company can replace the
asset with the depreciation reserve.
| Is This Answer Correct ? | 12 Yes | 7 No |
Answer / navjot dhillon
we can consider depreciation as a source of fund.because it
is only a book entry.it is a non-cash item.total income is
calculated after making deduction of the amount of
depreciation from gross total income. tax is never imposed
on gross total income. The amount of tax is calculated on
total income of the business.when the depreciation is
deducted from gross total income,it reduce the total income
of the business,so it is cleared that the lower slab rate
of tax is imposed.So depreciation is a sourse of fund
because it save the amount of tax.
| Is This Answer Correct ? | 5 Yes | 2 No |
Answer / tunde
depreciation do not involve movement of cash, but mere
accounting posting but the provision in the short run could
be used for other purposes hence it is a source of fund
| Is This Answer Correct ? | 3 Yes | 4 No |
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