IMANET Exam CMA Topic 6 Question 28 Discussion

Actual exam question for IMANET's Certified Management Accountant exam

Question #: 28
Topic #: 6

[All Certified Management Accountant Questions]

A depreciation tax shield is?

AAn after-tax cash outflow

BA reduction in income taxes.

CThe cash provided by recording depreciation.

DThe expense caused by depreciation.

Show Suggested Answer

Suggested Answer: B

A tax shield is something that will protect income against taxation. Thus, a depreciation tax shield is a reduction in income taxes due to a company's being allowed to deduct depreciation against otherwise taxable income. -

by Danica at May 03, 2022, 12:46 PM

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