Key Issues in Accounting for Entities in the Extractive Industries

question 59

Multiple Choice

Key issues in accounting for entities in the extractive industries include:

• A) Determining the size of the deposits of natural substances in the area of interest.
• B) Determining whether an asset has been acquired through the expenditures associated with exploration, evaluation and development.
• C) Allocating revenues to the periods in which they are earned.
• D) Determining the cost of capital in such a high-risk industry.
• E) All of the given answers.

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Definitions:

Operant Conditioning

A method of learning that employs rewards and punishments for behavior, promoting the association between behaviors and their consequences.

Environmental Circumstances

The conditions or factors that surround and influence the living and non-living elements of an ecosystem or environment.

Instinctive Behavior System

Behaviors that are innate, occurring naturally and automatically in response to specific stimuli.

Constraints

Limitations or restrictions that define the conditions or rules within which operations or processes occur.