Problem:
Property, plant and equipment generally represent a material portion of the total assets of most companies. Accounting for the acquisition and usage of such assets is, therefore, an important part of the financial report process.
Distinguish between revenue and capital expenditures and explain why this distinction is important.
Briefly define depreciation as used in accounting.
Identify the factors that are relevant in determining the annual depreciation and explain whether these factors are determined objectively or whether they are based on judgment.
Explain why depreciation is shown as an adjustment to cash in the operations section on the statement of cash flows.
Your answer is 300 words in everyday language suitable for a novice.