Accumulated Depletion

Question

Quizplus · Accepted Answer

Accumulated depletion is a contra-asset account used by companies engaged in natural resources extraction, such as oil and gas companies. It represents the depletion of natural resources over time and has a normal credit balance. Therefore, the correct answer is C, which states that accumulated depletion is a contra-asset account. Option A is incorrect because not all companies have natural resources. Option B is incorrect because accumulated depletion has a normal credit balance, not a debit balance. Option D is incorrect because accumulated depletion is shown on the statement of financial position as a deduction from the related natural resources' asset.