As natural resources are used up,the client has to recognize which of the following types of expense?
A)Depreciation expense.
B)Depletion expense.
C)Amortization expense.
D)Reclamation expense.

Question

Quizplus · Accepted Answer

Depletion expense is the expense recognized for the usage of natural resources, such as timber, oil, and minerals. As these resources are extracted, the value of the asset decreases and the company must recognize this decrease through depletion expense. Depreciation expense is recognized for the wear and tear of tangible assets, such as machinery or buildings. Amortization expense is recognized for intangible assets, such as patents or trademarks. Reclamation expense is recognized when a company takes steps to clean up or restore an area after natural resource extraction has taken place.

As Natural Resources Are Used Up,the Client Has to Recognize