What account is debited when the liability is initially capitalized for an asset retirement obligation to dismantle an ocean oil rig?
A) a retirement expense account
B) an accretion expense account
C) the oil rig asset account
D) a separate quasi-asset account

Question

Quizplus · Accepted Answer

When a liability for an asset retirement obligation is initially recognized, the corresponding debit is made to the asset account (in this case, the oil rig asset account) to capitalize the cost of dismantling as part of the asset's carrying amount.

What Account Is Debited When the Liability Is Initially Capitalized