The Method Used to Account for Oil and Gas Exploration

question 32

Multiple Choice

The method used to account for oil and gas exploration costs that capitalizes the exploration costs of productive wells is the: 

• A) reserve recognition accounting.
• B) successful efforts approach.
• C) soft asset approach.
• D) full-cost approach.

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Definitions:

Groupthink

A mode of thinking in highly cohesive groups in which the desire to reach unanimous agreement overrides the motivation to adopt proper rational decision-making procedures.

Unanimity

Complete agreement among all members or parties involved on a particular issue or decision.

Rational

Based on or in accordance with reason or logic; capable of making sensible or logical decisions.

Antecedent

A preceding event, condition, or cause that logically goes before something else.