The systematic allocation of the cost of a natural resource from the balance sheet to the income statement.
The systematic allocation of the cost of a natural resource from the balance sheet to the income statement.
Amount of depletion charged to expense on the income statement for the period indicated in its heading. The amount is also credited to the contra asset account Accumulated Depletion.
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.
What is depletion? Definition of Depletion In accounting, depletion refers to the expensing of a company’s cost of a natural resource. Ultimately, it means moving a natural resource’s cost from the company’s...
Are depreciation, depletion and amortization similar? In accounting the terms depreciation, depletion and amortization often involve the movement of costs from the balance sheet to the income statement in a systematic...
Long term assets of a company such as minerals, oil reserves, timberland, stone quarries, etc. The term depletion is associated with natural resources.
An asset account which is expected to have a credit balance (which is contrary to the normal debit balance of an asset account). The contra asset account is related to another asset account. For example, the contra asset...
What does amortization mean? Definition of Amortization In general, the word amortization means to systematically reduce a balance over time. In accounting, amortization is conceptually similar to the depreciation of a...
Since our Explanation of Cash Flow Statement illustrates how the amounts are determined, you will get a better understanding of this very important financial statement. No longer will you look at only the income...
Our Explanation of Bookkeeping provides you with a rich understanding of the recording of transactions. It then discusses the additional steps necessary for preparing accurate financial statements. This is great for...
Our Explanation of the Balance Sheet provides you with a basic understanding of a corporation's balance sheet (or statement of financial position). You will gain insights regarding the assets, liabilities, and...
Our Explanation of Adjusting Entries gives you a process and an understanding of how to make the adjusting entries in order to have an accurate balance sheet and income statement. Eight examples including T-accounts for...
Featured Review
"It is my sincere pleasure to give full support for the AccountingCoach website. As a college professor at two (2) colleges and a full-time accounting professional at Toyota, I refer my students to the AccountingCoach website for source data, concept explanations and resources. AccountingCoach is one of my main sources for accounting information, it has easy access and the information provided is simple to understand. My students and I love the site. My lectures are more powerful because I use the site as my validation and source data. The site makes teaching and applying accounting concepts so much easier when you have a reliable source like AccountingCoach. The site is full of information and will give you the knowledge base to be successful in the world of accounting and in business. The site is great for those who may not make it to college to take a formal accounting course like mine. It is a great benefit. Thank you AccountingCoach for assisting us, ensuring the world of accounting is easier to understand, and for providing an easy to use site for finding information and an affordable pathway to increase your knowledge." - Renee W.
Join PRO or PRO Plus and Get Lifetime Access to Our Premium Materials
Read all 2,645 reviews
For the past 52 years, Harold Averkamp (CPA, MBA) has
worked as an accounting supervisor, manager, consultant, university instructor, and innovator in teaching accounting online. He is the sole author of all the materials on AccountingCoach.com.
We now offer 10 Certificates of Achievement for Introductory Accounting and Bookkeeping: