Chapter 30: Depletion

Question 1

Include minerals, oil, natural gas and similar non regenerative resources.

Answer 1

Mineral resources

Question 2

Search for mineral resources after the entity has obtained legal right

Answer 2

Exploration and evaluation of mineral resources

Question 3

The expenditures incurred in connection with the exploration and evaluation of mineral resources before the technical feasibility and commercial viability.

Answer 3

Exploration and evaluation of expenditures

Question 4

Expenditures incurred after the technical feasibility and commercial viability are demonstrable.

Answer 4

Development expenditures

Question 5

Expenditures related to development of mineral resources cannot be recognized as exploration and evaluation expenditures.

Answer 5

T

Question 6

Initial measurement

Answer 6

Cost

Question 7

Subsequent Measurement

Answer 7

Cost model or revaluation model

Question 8

Are material objects of economic balue and utility to man produced by nature.

Answer 8

Wasting assets

Question 9

Usually include coal, oil, ore, precious metals like gold and silver and timber.

Answer 9

Natural resources

Question 10

Two main features of wasting assets

Answer 10

1. Physically consumed.
2. are irreplaceable

Question 11

Cost of Wasting Asset

Answer 11

1. Acquisition cost
2. Exploration cost
3. Development Cost
4. Estimated restoration cost

Question 12

Two method of accounting for exploration cost

Answer 12

a. Successful effort method
b. Full cost method

Question 13

2 kinds of stripping cost

Answer 13

1. Development phase
2. Production phase

Question 14

Is the expenditure incurred before the technical feasibility and commercial viability of extracting a mineral resource are demonstrated.

Answer 14

Exploration cost

Question 15

Includes acquisition of right to explore, geological study, exploratory drilling, trenching and sampling, activity.

Answer 15

Exploration cost

Question 16

Is the cost incurred to exploit or extract the natural resource that has been located through successful exploration.; May be in the form of Tangible or intagible equipment.

Answer 16

Development Cost

Question 17

Is the cost to be incurred in order to bring the property to its original condition.

Answer 17

Estimated Restoration Cost.

Question 18

The removal, extraction or exhaustion of a natural resource

Answer 18

Depletion

Question 19

is the systematic allocation of the depletable amount of a wasting asset over the period the natural resource is extracted or produced.

Answer 19

Depletion

Question 20

Depletion is computed using

Answer 20

Output or prodction method

Question 21

How to compute depletable amount of the wasting asset

Answer 21

Deplatable amount of WA / Units estimated to be extracted

Question 22

How to compute depletion rate per unit

Answer 22

Multiplied by units extracted during the year at the depletion for the period.