If the Amount Extracted from a Coal Mine Was Different

question 47

Multiple Choice

If the amount extracted from a coal mine was different every year for four years,you would:

• A)recompute the depletion expense rate per unit each year.
• B)use the same depletion expense rate per unit each year.
• C)debit Depletion expense for the same amount each year.
• D)credit Accumulated depletion-coal mine for the same amount each year.

---

Definitions:

Merchandise

Merchandise encompasses the goods and products that a retail business purchases to then sell to its customers.

Lower of Cost

An accounting principle requiring that inventory be recorded at the lower of its historical cost or market value if the market value drops below cost.

Net Realizable Value

The estimated selling price in the ordinary course of business, minus the estimated costs of completion and the estimated costs necessary to make the sale.

Selling Price

The amount of money a buyer pays to purchase a product or service from a seller.