Question

In accordance with the expense principle, the term ____

describes the process of expensing natural resource's cost in the period related revenues are earned.

Answer 1

The term that describes the process of expensing natural resource's cost in the period related revenues are earned is called depletion

Step-by-step explanation:

The term that describes the process of expensing natural resource's cost in the period related revenues are earned is called depletion.

Depletion is an accounting method used to allocate the cost of natural resources over time as they are extracted and consumed. This process reflects the gradual reduction in the economic value of the natural resources. It is commonly used for resources such as oil, gas, minerals, and timber.

For example, if a company owns a timber forest, the cost of acquiring and extracting the timber would be gradually expensed over the period of time when the timber is sold and revenues are earned.