The cost of natural resources is not allocated to expense because the natural resources are replaceable only by an act of nature.

Question

Quizplus · Accepted Answer

The cost of natural resources is allocated to expense through depletion, which is the process of allocating the cost of natural resources over the period of their exploitation or use. Depletion expense is used to recognize the reduction of the natural resources' value due to their extraction and use.

The Cost of Natural Resources Is Not Allocated to Expense