State whether following statement is TRUE/FALSE with REASON. Cost Concept says assets are recorded at lower of cost or market value.
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This statement is false. Depreciation is a non cash accounting charge and does not have a direct impact on the amount of cash flow generated by a company. Since, depreciation was taken out while calculating net income and is not a cash outlay, depreciation is added back in profits, while creating the cash flow statement.
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FALSE.
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