Which of the following are non-cash expenses? 1. Legal fees 2. Amortisation 3. Depreciation 4.…

Amortisation and depreciation (2 and 3) are the non-cash expenses. Both spread the cost of an asset that was paid for earlier (an intangible asset or a fixed asset) over its useful life, so they reduce profit without any cash leaving the business in the year. Legal fees and consultancy fees are paid to outside parties and involve an actual outflow of cash, so any choice that includes item 1 or item 4 is wrong. This is why depreciation and amortisation are added back to net profit when cash flow from operations is worked out by the indirect method.