Which of the following statements is true about the full-costing method?
A)The cost of a dry well would be written off immediately as a loss.
B)All costs are recorded as assets and then depleted over the resource's useful life.
C)All costs are written off immediately as a loss.
D)All costs are recorded as assets and remain on the books as assets.

Question

Quizplus · Accepted Answer

The full-costing method involves recording all costs associated with a resource as assets and then depreciating or depleting those assets over the resource's useful life. This includes costs such as exploration, drilling, and development. Option A and C are incorrect as they both involve immediately writing off costs as a loss. Option D is incorrect as it suggests that all costs remain on the books as assets indefinitely, which is not accurate for the full-costing method.

Which of the Following Statements Is True About the Full-Costing