Question

What is the term for the costs associated with production of a natural resource, such as drilling costs, that do not result in a physical asset such as equipment?

A. exploration costs
B. intangible development costs
C. tangible equipment costs
D. restoration costs

Answer 1

The term for costs associated with production of a natural resource, such as drilling costs, that don't result in a physical asset such as equipment is exploration costs. Option A is correct.

Step-by-step explanation:

The term for the costs associated with production of a natural resource, such as drilling costs, that do not result in a physical asset such as equipment is exploration costs. Exploration costs refer to the expenses incurred in searching for new natural resource deposits, including costs for geological surveys, geophysical exploration, and drilling. These costs are considered part of the overall cost of exploring and developing new natural resource reserves.

The term for the costs associated with the production of a natural resource that do not result in a physical asset such as equipment is intangible development costs. These are costs like drilling a well, which are necessary to prepare for extraction but don't create an asset with tangible value like machinery. This contrasts with tangible equipment costs, which are associated with the purchase or manufacture of physical assets.