The Three Types of Costs Incurred in Coal Production Are

question 4

Essay

The three types of costs incurred in coal production are acquisition costs (costs to acquire the coal rich lands plus the present value of future cash flows necessary to restore the sites minus the cost of the land),exploration costs (costs of mining),and development costs (pipes,roads,and so on,to extract and transport the coal to customers).
Required:
Should each of these costs be capitalized or expensed? Explain.

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Definitions:

Bill of Lading

A legal document between a shipper and carrier; it details the type, quantity, and destination of the goods being carried.

Negotiable Instrument

An instrument in writing that, when transferred in good faith and for value without notice of defects, passes a good title to the instrument to the transferee.

Contract of Carriage

An agreement between a carrier and a shipper for the transport of goods or passengers.

Title Document

Legal paperwork that proves ownership of a particular asset, such as real estate or a vehicle.