Natural resources are first recorded as ________,then recorded as ________ when extracted,and lastly recorded as ________ when sold.
A)fixed assets;inventory;cost of goods sold
B)goods available to sell;inventory;a loss
C)inventory;revenue;cost of goods sold
D)fixed assets;revenue;cost of goods sold

Question

Quizplus · Accepted Answer

Because depletion of the natural resource is necessary to obtain the inventory,the depletion computed during a period is added to the cost of the inventory,not expensed in the period.The Inventory remains as an asset on the balance sheet until it is sold,at which time its cost is removed from the balance sheet and reported on the income statement as an expense called Cost of Goods Sold.

Natural Resources Are First Recorded as ________,Then Recorded as ________

Natural Resources Are First Recorded as ,Then Recorded as