Final answer:
In accounting, natural resources are recorded as assets. This approach helps manage costs and depreciation based on the resource's role in production and their ability to renew. Examples of natural resources include ingredients in food production or energy sources like gas and electricity.
Step-by-step explanation:
The proper accounting for natural resources is to record the original cost as an asset. When accountants deal with natural resources, they follow procedures that reflect the unique aspects of these resources. Natural resources, as defined in economics, include items provided by nature without human alteration and can be used for the production of goods and services. Accounting for these items as assets allows organizations to manage costs and depreciation as the resources are consumed. Examples of natural resources in production include the flour, water, and tomatoes used for making a pizza, or the gas and electricity needed to power the oven. It is crucial to note that these resources are also categorized based on their renewal capacity, such as nonrenewable resource, which means they are finite and cannot be replenished at a pace that matches human consumption.