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epletion is the process of allocating the cost of natural resources to periods when they are extracted true or fals

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter17: Activity Resource Usage Model And Tactical Decision Making

Section: Chapter Questions

Problem 5DQ: What is a relevant cost? Explain why depreciation on an existing asset is always irrelevant.

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Which of the following depreciation methods most closely approximates the method used to deplete the cost of natural resource? a. Straight-line method b. Double-declining-balance method c. Either the cost model or the revaluation model d. The recoverable amount model
What is the primary objective of depletion accounting in natural resource industries?
The write-off of the cost of plant and equipment is called a.amortization. b.depletion. c.depreciation. d.deterioration
Is the declining-balance method an acceptable way to compute depletion of natural resources? Explain.
What is the systematic periodic transfer of the cost of a fixed asset to an expense account during its expected useful life called (also thought of as the decline in usefulness of the fixed asset over time)? Group of answer choices fixing costing amortization depreciation
Explain the differences between cost depletion, asset depreciation, and amortization. Explain the Modified Accelerated Cost Recovery System (MACRS).
True (t) or False (f) ______ The Accumulated Depletion account is deducted from the cost of the natural resource in the balance sheet.
Instead of valuing assets, depreciation is a cost allocation procedure. This statement should be explained.
The systematic allocation of land's cost to expense is called depreciation. True False
The difference between cost of the asset and residual value is known as a . Depletion b . Salvage value c . Total cost of the asset . d . Depreciable cost
As time passes, fixed assets other than land lose their capacity to provide useful services. To account for this decrease in usefulness, the cost of fixed assets is systematically allocated to expense through a process called a. matching b. equipment allocation c. depreciation d. accumulation
What is the purpose of a depletion base? O to regulate the consumption of natural resources O to categorize natural resources for tax purposes O to determine a restoration goal for natural resources O to determine the cost of natural resources to be allocated