MCQ Practice Single Best Answer Topic: Elements of Accounting

Q Which of the following expenses does not affect your cash position in running a business:

Question ID

#24247

Subchapter

Elements of Accounting

Action

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Correct Answer: C

The correct answer is:

C. Depreciation Expense ✅

👉 Explanation:

Depreciation is a non-cash expense.
- It represents the allocation of the cost of a fixed asset over its useful life.
- No actual cash leaves the business when depreciation is recorded.
Lease Expense and Advertising Expense involve actual cash payments, so they reduce cash.

💡 Key point:
Non-cash expenses like Depreciation, Amortization, and Provisions affect profit but not the cash position.