2016年美国CPA练习题精选：Business 13

　　A depreciation tax shield is：

　　a. The expense caused by depreciation.

　　b. An after-tax cash outflow.

　　c. A reduction in income taxes.

　　d. Caused by the fact that depreciation does not affect cash flow.

　　答案：C

　　Explanation

　　Choice “c” is correct. Whenever depreciation protects income from taxation， it is known as a depreciation tax shield.

　　Choice “b” is incorrect. A depreciation tax shield may result in after-tax cash inflow， but not outflow.

　　Choice “a” is incorrect， per above.

　　Choice “d” is incorrect. A depreciation tax shield is caused by the tax deductibility of the depreciation expense， not by the fact that depreciation does not affect cash flow.