Which one of the following statements is not true?
A)Depletion may be credited either to Accumulated Amortization or directly to the asset account.
B)If statutory depletion is used for tax purposes, it must also be used for financial reporting purposes.
C)Depletion costs can be added directly to inventory.
D)The total depletion charges for income tax purposes over the life of an asset may exceed the cost of the asset.

Question

Quizplus · Accepted Answer

Statutory depletion for tax purposes does not have to be used for financial reporting purposes. Financial reporting typically follows Generally Accepted Accounting Principles (GAAP), which may differ from tax accounting methods.

Which One of the Following Statements Is Not True