The computation of depletion expense is most closely related to which method for computing depreciation?

Question

Quizplus · Accepted Answer

Depletion expense is the cost allocation for natural resources, similar to depreciation for tangible assets. The method for computing depletion expense is most closely related to the units-of-production method for computing depreciation, as both are based on the production or usage level of the asset. The straight-line and double-declining balance methods are not typically used for natural resources, as their value is often tied to the amount of resource remaining, rather than time or usage. The specific method selected for computing depletion expense does depend upon the specific natural resource being depleted, but this does not mean that option D is the correct answer, as it does not address the method itself.

The Computation of Depletion Expense Is Most Closely Related to Which