What is accumulated depletion?
Accumulated depletion is the amount of depletion expense that has built up over time in relation to the use of a natural resource. This amount is paired with the natural resource asset on the balance sheet as a contra account.
What is accumulated depreciation quizlet?
Accumulated depreciation. a contra-asset account that holds the cumulative sum of all depreciation recorded for an asset. Adjusted trial balance. a list of all the accounts of a business with their adjusted balances.
How is accumulated depletion disclosed in the financial statements?
The cumulative amount of depletion expense pertaining to the natural resources shown on the balance sheet. The account has a credit balance and will be reported on the balance sheet as a contra asset.
Where is accumulated depletion recorded?
Accumulated depreciation is the sum of all recorded depreciation on an asset to a specific date. Accumulated depreciation is presented on the balance sheet just below the related capital asset line. The carrying value of an asset is its historical cost minus accumulated depreciation.
Is accumulated depletion a liability?
If anything, accumulated depreciation represents the amount of economic value that has been consumed in the past. It is not a liability, since the balances stored in the account do not represent an obligation to pay a third party.
What is depletion quizlet?
Depletion. process of allocating the cost of a natural resource to the period when it is consumed.
What is depletion in accounting quizlet?
Depletion: That portion of a natural resource’s cost that is used up in a particular period. Depletion expense is computed in the same way as units-of-production depreciation. A depleted asset usually flows into inventory and eventually to cost of goods sold as the resource is sold.
What type of account is accumulated depreciation quizlet?
**The accumulated depreciation account is an asset account with a credit balance (also known as a contra asset account); this means that it appears on the balance sheet as a reduction from the gross amount of fixed assets reported.
What is accumulated depletion used for?
Depletion is an accrual accounting technique used to allocate the cost of extracting natural resources such as timber, minerals, and oil from the earth. Like depreciation and amortization, depletion is a non-cash expense that lowers the cost value of an asset incrementally through scheduled charges to income.
How do you get accumulated depletion?
Accumulated Depletion Calculated
- First a company debits a depletion account for the resources extracted.
- Next, that resource is credited to an accumulated depletion account in order to report the original cost of the entire natural resource on the financial records.
Is accumulated amortization an asset?
Presentation of Accumulated Amortization Accumulated amortization is recorded on the balance sheet as a contra asset account, so it is positioned below the unamortized intangible assets line item; the net amount of intangible assets is listed immediately below it.