Which of the following is NOT true regarding depletion?
A)Depletion is the systematic reduction of a natural resource's carrying value on the books.
B)Depletion is computed in a similar manner to straight-line depreciation.
C)Depletion is an expense that applies to the natural resources in the same way depreciation applies to fixed assets.
D)Depletion is an expense that applies to natural resources in the same way amortization applies to intangible assets.

Question

Quizplus · Accepted Answer

Depletion is calculated based on the usage or extraction of the natural resource, not in a straight-line manner like depreciation. This means the amount of depletion expense can vary depending on how much of the resource is extracted in a given period, which differs from the consistent expense allocation seen in straight-line depreciation.

Which of the Following Is NOT True Regarding Depletion