Two Alternative Methods of Accounting for the Cost of Oil

question 37

Multiple Choice

Two alternative methods of accounting for the cost of oil and gas properties have been widely used.The method that capitalizes all costs associated with all wells is the

• A)successful-efforts method
• B)full-cost method
• C)variable-cost method
• D)specific-cost method

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Definitions:

Stop Payment

An order given to a bank to not pay out on a check that has been issued but not yet cashed.

Electronic Fund Transfer

The movement of funds between different bank accounts electronically without the need for physical paper money.

Draft

A preliminary version of a piece of writing or a plan, or a banking term referring to a written order by one party to pay a certain sum to another party.

Instrument

A formal legal document representing a right to payment or to an interest in property.