The Accountant for a Mining Exploration Company Presents the Following

question 5

Multiple Choice

The accountant for a mining exploration company presents the following figures to the directors of the company as being possible values that could be assigned to its total non-current assets (comprising exploration and evaluation costs and purchases of plant and machinery to date) - $750 000,$1 600 000,or $2 350 000.Use of the figure $2 350 000 indicates that the company is probably using which of the following methods of accounting for exploration and evaluation costs?

• A) Expense
• B) Full-cost
• C) Successful-efforts
• D) Area-of-interest

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Definitions:

Credit Risk

The chance of incurring a loss due to a borrower's inability to pay back a loan or fulfill agreed-upon terms.

Interest Rate

The rate of a loan that is attributed as interest for the borrower, often presented as an annual percentage of the outstanding amount of the loan.

Bankruptcy

A legal procedure for dealing with debt problems of individuals and businesses; officially declaring the inability to pay outstanding debts.

Appliance Manufacturer

A company involved in designing, producing, and selling electrical or mechanical devices for domestic use.