An Activity-Based Method Is Most Often Used to Allocate the Cost

question 107

Multiple Choice

An activity-based method is most often used to allocate the cost of natural resources over its useful life because:

• A) This method generally results in the highest amount of assets in the earlier years.
• B) This is the simplest method, and natural resource activity is hard to estimate.
• C) The usefulness of natural resources generally is directly related to the amount of the resources extracted.
• D) This method generally results in the highest amount of assets in the later years.

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Definitions:

Silver And Gold

Precious metals historically used as a medium of exchange, investment, and to back currency values in various monetary systems.

Quantity

The amount or number of a material or immaterial good that can be measured or quantified.

Quality

A measure of how good or suitable something is in comparison to similar items or services.

Seigniorage

Seigniorage is the profit made by a government by issuing currency, especially the difference between the face value of coins and their production costs.