Question

In the case of wasting assets, the amount of charge determined on the basis of exhaustion of the assets is known as __________.

• A. Depreciation
• B. Depletion
• C. Amortization
• D. Shrinkage

Answer 1

The correct option is B Depletion

solution:

Depletion refers to an accrual accounting method used to determine the expense of extracting natural resources from the earth, such as wood, minerals, and oil. Just like depreciation and amortisation, depletion is a non-cash expense. It incrementally lowers an asset's cost value through scheduled income charges

hence the correct option: B