Asked by justin woessner on Jun 17, 2024
Verified
Depletion is:
A) The process of allocating the cost of natural resources to the period when it is consumed.
B) Calculated using the double-declining balance method.
C) Also called amortization.
D) An increase in the value of a natural resource when incurred.
E) The process of allocating the cost of intangibles to periods when they are used.
Depletion
The allocation of the cost of natural resources over the period of their extraction or harvesting, recognizing the exhausting nature of these assets.
Natural Resources
Materials or resources found in the natural environment that are considered valuable in their natural form, such as timber, oil, and minerals.
- Acquire knowledge on the notion and financial handling of amortization, depletion, and depreciation.
Verified Answer
LW
LAI WEN YIING KARENJun 21, 2024
Final Answer :
A
Explanation :
Depletion is the process of allocating the cost of natural resources to the period when it is consumed. Option B refers to depreciation, option C refers to amortization of intangible assets, option D is incorrect as an increase in the value of a natural resource is called appreciation, and option E refers to amortization of intangible assets.
Learning Objectives
- Acquire knowledge on the notion and financial handling of amortization, depletion, and depreciation.
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