The entry to record an obligation for removal and restoration incurred during the exploration and evaluation (E&E) phase of a mining project is:
A) DR $\quad$E&E asset $\quad$$\quad$XX
CR $\quad$E&E expense$\quad$XX
B) DR $\quad$E&E expense$\quad$$\quad$$\quad$XX
CR $\quad$Provision for removal and restoration$\quad$XX
C) DR $\quad$Removal and restoration expense $\quad$XX
CR $\quad$E&E asset$\quad$$\quad$$\quad$XX
D) DR $\quad$E&E asset$\quad$$\quad$$\quad$XX
CR $\quad$Provision for removal and restoration$\quad$XXX

Question

The entry to record an obligation for removal and restoration incurred during the exploration and evaluation (E&E) phase of a mining project is:
A) DR $\quad$E&E asset $\quad$$\quad$XX
CR $\quad$E&E expense$\quad$XX
B) DR $\quad$E&E expense$\quad$$\quad$$\quad$XX
CR $\quad$Provision for removal and restoration$\quad$XX
C) DR $\quad$Removal and restoration expense $\quad$XX
CR $\quad$E&E asset$\quad$$\quad$$\quad$XX
D) DR $\quad$E&E asset$\quad$$\quad$$\quad$XX
CR $\quad$Provision for removal and restoration$\quad$XXX

Quizplus · Accepted Answer

The correct entry to record an obligation for removal and restoration incurred during the exploration and evaluation phase of a mining project involves debiting the E&E asset and crediting a provision for removal and restoration. This reflects the increase in the asset's value due to the future obligation and recognizes the liability for removal and restoration.

The Entry to Record an Obligation for Removal and Restoration \quad

The Entry to Record an Obligation for Removal and Restoration $\quad$