Galaxy Interiors income statement shows depreciation of $1,644, sales of $21,415, interest paid of $1,282, net income of $1,374, and costs of goods sold of $16,408. What is the amount of the noncash expenses

Respuesta :

Answer:

the non cash expenses will be the depreciation of 1,644

Explanation:

The depreication is an accounting concept for the applpication of the matching principles when the company acquires a long-term asset It usually pays the entire amount in the first or first period but, it will be used for a longer period of time. If all the cost is applied as expense then the start-up companies will ahve net losses during the first year pretty much all the time.

Therefore, the accounting creates the depreciation to spread the cost over a longer period of time and not charged entirely into one period.

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