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Depletion is the process of allocating the cost of an
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02 Jul 2004, 11:14
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E
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Depletion is the process of allocating the cost of an investment in natural resources through systematic charges to income as the supply of the physical asset reduces the course of operations.
(A) systematic charges to income as the supply of the physical asset reduces the course
(B) systematic charges to income whereas the supply of the physical asset is reduced in the course
(C) systematic charges for income as the supply of the physical asset is reduced in the course
(D) systematic charges to income as the supply of the physical asset is reduced in the course
(E) systematic charges to income whereas the supply of the physical asset reduces the course
(c) stolyar
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Re: Depletion is the process of allocating the cost of an
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02 Jul 2004, 12:04
I choose D.
the sentence will be:
Depletion is the process of allocating the cost of an investment in natural resources through systematic charges to income (becuse) as the supply of the physical asset is reduced in the course of operations.
Re: Depletion is the process of allocating the cost of an
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02 Jul 2004, 12:49
First of all, regarding to this question,
1. Charge(noun or verb) can be used with prepostion with, for, and to. In my opinion, "charge to+ somebody or account such as, checking account" are used for express meaning that some duty is imposed to some body, whereas "charge for+something" means expense or pay for acquring someting. Therefore, in this question, "charge for" might be correct, because "industry charge for earning income."
2. I think that in this question, "as" does not mean because, but means "during the course of operation, more reduced"
Hence, I think "c" would be correct.
Second, I am an international, therefore, it is not easy to distinguish correct pronoun. I might have seen the question that require me to distinguish "through" from "by" or "by means of".
Who does explain about the difference?
Yes, it is D. I took it from my financial accounting lessons, which I attended as a pre-MBA practice. BTW, there is yet another form of allocating costs against income—amortization. This term is applied when we deal with intangible assets, such as goodwill, patents, or copyrights.
For those who are interested, I can give a small example of amortization: On 1/1/2004 company buys a certain patent for $60 000. Its useful life is 10 years; the annual amortization is therefore $6000. The entries in 2004 will be:
1/1/2004
Patent 60 000
Cash 60 000
To record costs of acquiring patent
12/31/2004
Patent Expense (Amortization) 6000
Patent 6000
To record patent amortization
Archived Topic
Hi there,
This topic has been closed and archived due to inactivity or violation of community quality standards. No more replies are possible here.
Still interested in this question? Check out the "Best Topics" block above for a better discussion on this exact question, as well as several more related questions.
Thank you for understanding, and happy exploring!
gmatclubot
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