Which the Following Statements Regarding Accounting for Natural Resources Is

question 147

Multiple Choice

Which the following statements regarding accounting for natural resources is INCORRECT?

• A)Natural resources are often called wasting assets because they are actually physically used up over time.
• B)When the natural resource is extracted, the entity follows an approach much like the straight-line method of depreciation to account for the production.
• C)If all of the natural resource that is extracted is regarded as sold, the amount depleted is transferred directly from long-term assets to the income statement as depletion expense.
• D)The portion of the extracted natural resource that is not immediately sold, becomes inventory.