Coal mines and oil reserves are:
A)depleted using the straight-line method.
B)depleted using an accelerated method.
C)not depleted because they belong to the earth.
D)depleted using the units-of-production method.

Question

Quizplus · Accepted Answer

Coal mines and oil reserves are depleted using the units-of-production method, which calculates depletion expense based on the amount of resources extracted and sold each period. This method is based on the assumption that a certain amount of resources is being used up each time they are extracted and sold, and therefore, the cost of depletion should be spread over the periods during which the extraction takes place.

Coal Mines and Oil Reserves Are