Which of the Following Statements About Depreciation Is FALSE

Multiple Choice

Which of the following statements about depreciation is FALSE?

A) Depreciation does not generate cash.
B) Depreciation is an allocation of the original cost of an asset to the periods in which the asset is used.
C) Depreciation does not entail an outflow of cash.
D) Depreciation is a means of setting aside cash for the replacement of an asset.