The Entry to Record an Obligation for Removal and Restoration

question 3

Multiple Choice

The entry to record an obligation for removal and restoration incurred during the exploration and evaluation (E&E) phase of a mining project is:

• A) DR E&E asset; CR E&E expense
• B) DR Removal and restoration expense; CR E&E asset
• C) DR E&E asset; CR Provision for removal and restoration
• D) DR E&E expense; CR Provision for removal and restoration

---

Definitions:

Direct Labour Hours

The number of hours worked directly on manufacturing a product or providing a service, used in costing and operational efficiency analysis.

Budgeted Balance Sheet

A financial statement that projects the financial position of a company at a future date, showing expected assets, liabilities, and equity balances.

Cash Number

A numerical value representing the amount of liquid assets or cash available to an entity at a specific point in time.

Cash Budget

A financial plan that estimates cash inflows and outflows over a specific period, usually used to assess liquidity.