If a mining company extracts 2,000,000 tons in a period but only sells 1,600,000 tons,

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Quizplus · Accepted Answer

Depletion expense is recognized on the amount of resources extracted and sold, which in this case is 1,600,000 tons. The remaining 400,000 tons are still part of the asset and will be recognized as depletion expense when they are eventually sold or depleted. Therefore, no separate accumulated depletion account is needed for the 400,000 tons.

If a Mining Company Extracts 2,000,000 Tons in a Period