Depreciation of natural resources is initially debited to
A) cost of goods sold expense.
B) inventory.
C) depreciation expense.
D) loss on extraction of resources.

Question

Quizplus · Accepted Answer

Depreciation of natural resources is initially debited to inventory because the cost associated with the depletion of natural resources is capitalized as part of the cost of the inventory produced. This cost is then expensed as part of the cost of goods sold when the inventory is sold.

Depreciation of Natural Resources Is Initially Debited to