An oil reserve is depreciated because of physical deterioration or obsolescence.

Name: An oil reserve is depreciated because of physical deterioration or obsolescence.
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Question

Quizplus · Accepted Answer

Oil reserves are not depreciated because they are not considered to have a determinable useful life. Instead, they are subject to depletion, which is an accounting method for allocating the cost of natural resources based on the proportion of the resource that has been extracted.

An Oil Reserve Is Depreciated Because of Physical Deterioration or Obsolescence