Which of the following best describes a non-cash expense?

A non-cash expense refers to an accounting expense that is recorded on the income statement but does not involve a direct cash outflow at the time the expense is incurred. This means that while it affects the profit and loss statement, it does not immediately impact the cash available in the business. A classic example of a non-cash expense is depreciation, which allocates the cost of a tangible asset over its useful life without actual cash leaving the business at the time it is recorded.

In contrast, other options focus on cash flow or actual payments. The first option, which suggests that a non-cash expense reduces cash flow immediately, is inconsistent with the very definition of a non-cash expense. The option regarding costs associated with producing goods or services does not pinpoint the non-cash nature of expenses, as some of these costs may involve cash transactions. Lastly, payments for fixed assets involve cash outflows and thus do not align with what constitutes a non-cash expense. Hence, the selection that best describes a non-cash expense is the one that emphasizes its lack of immediate impact on cash resources in the current period.