Natural resources are
A) depreciated using the units-of-activity method.
B) physically extracted in operations and are replaceable only by an act of nature.
C) reported at their market value.
D) amortized over a period no longer than 40 years.

Question

Quizplus · Accepted Answer

Natural resources are physically extracted in operations and cannot be replaced except through natural processes such as regrowth or replenishment. Therefore, the most appropriate option is B. The units-of-activity method is a method of depreciation, which is not relevant to natural resources. The market value of natural resources may fluctuate widely and is therefore not the right measure of their value. Finally, the amortization period of natural resources depends on their expected useful life, and it may exceed 40 years.

Natural Resources Are