Depletion expense for a period is only recognized on natural resources that have been extracted and sold during the period.

Question

Quizplus · Accepted Answer

Depletion expense is recognized for natural resources that have been extracted and sold during the period, as this represents the reduction in the available amount of the resource. The expense is typically calculated by dividing the cost of the natural resource by the estimated total units available, and then multiplying that depletion rate by the number of units extracted and sold during the period. Therefore, depletion expense is only recognized on resources that have actually been used up and sold, rather than on those that are still in the ground.

Depletion Expense for a Period Is Only Recognized on Natural