The Most Common Method of Recording Depletion for Accounting Purposes

question 49

Multiple Choice

The most common method of recording depletion for accounting purposes is the

• A) percentage depletion method.
• B) decreasing charge method.
• C) straight-line method.
• D) units-of-production method.

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Definitions:

Consolidated Cost Of Goods Sold

The aggregated cost of goods that have been used up in the production of goods or services sold by a company and its subsidiaries.

Year-end

The end of a fiscal year or calendar year, when companies close their books and summarize financial activities.

Eliminate Intra-entity Transfer

A consolidation procedure that removes transactions between entities within the same corporate group to avoid double counting in consolidated financial statements.

Equity Method

An accounting technique used to assess the profits earned by a company through its investment in another company, by reporting the income based on the investee's net income and changes in equity.