Final answer:
The statement that depletion is normally calculated on a straight-line basis is false; although straight-line is a commonly known method, the units-of-production method is more precise and typically used for natural resources like minerals and oil. Option B is correct.
Step-by-step explanation:
Depletion is normally calculated on a straight-line basis. A. True B. False. When discussing this statement, it is important to understand what depletion means in a business and accounting context. Depletion refers to the allocation of the cost of natural resources over time. While there are various methods to calculate depletion, such as the units-of-activity method, it is often thought that the most common method is the straight-line basis. However, this is not necessarily true. The method chosen depends on several factors, including the nature of the resource, the pattern of resource use, and the preference of the reporting company.
Assuming the context of the statement is referring to how most companies typically compute depletion, the answer would be B. False. The more precise method often used is the units-of-production method, especially for resources like minerals and oil, where the depletion rate is more closely tied to the actual physical extraction of the resource. Therefore, different depletion methods are more representative of the consumption patterns of natural resources than the straight-line approach.