The accumulated depletion account is a. an expense account b. reported on the income statement as other expense c. reported on the balance sheet as a deduction from the cost of the mineral deposit d. an intangible asset account

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Business

Kaitlin Lindsey

19 October, 03:03

The accumulated depletion account is a. an expense account b. reported on the income statement as other expense c. reported on the balance sheet as a deduction from the cost of the mineral deposit d. an intangible asset account

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Alvaro Ross · Answer 1

The answer is c. reported on the balance sheet as a deduction from the cost of the mineral deposit.

Explanation:

Accumulated Depletion Account is the account showing the accumulated depletion expenses relating to the use/exploitation of natural resources since the beginning.

Just like Accumulated Depreciation Account, The Accumulated Depletion Account is a contra-asset account which is reported on the Balance Sheet under the Natural Resources Account; the net effect of the two account shows the net book value of Natural Resources Account.

Thus, c. reported on the balance sheet as a deduction from the cost of the mineral deposit. is the correct choice.