The capitalized costs for the development of a natural resource are allocated over the expected life of the asset using:
A)depreciation.
B)amortization.
C)depletion.
D)accretion.

Question

Quizplus · Accepted Answer

Depletion is the appropriate method of allocating the capitalized costs of natural resources such as minerals, oil, and gas over the expected life of the asset. Depreciation is used for tangible assets like buildings and equipment, while amortization is used for intangible assets like patents and trademarks. Accretion is generally used for the gradual increase in the value of certain long-term liabilities.

The Capitalized Costs for the Development of a Natural Resource