Which of the following depreciation methods most closely approximates the method used to deplete the cost of natural resources?
A) Straight-line method
B) Double-declining-balance method
C) Sum-of-the-years'-digits method
D) Units-of-production method

Question

Quizplus · Accepted Answer

The units-of-production method is best suited to deplete the cost of natural resources because it takes into account the depletion of the resource in proportion to its usage. Instead of spreading the cost evenly over time, this method allocates the cost based on the number of units extracted, which is more reflective of the actual depletion of the resource.

Which of the Following Depreciation Methods Most Closely Approximates the Method