Significant Differences Between Accounting and Oil and Gas Operations and the Conventional Accounting for Manufacturing or Mechanize Operation.

2083 Words May 7th, 2010 9 Pages
SIGNIFICANT DIFFERENCES BETWEEN ACCOUNTING AND OIL AND GAS OPERATIONS AND THE CONVENTIONAL ACCOUNTING FOR MANUFACTURING OR MECHANIZE OPERATION.

By

Demoore Suleman

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Conventional Manufacturing Account
1.Definition: Manufacturing account, the term I use to describe business organizations engaged in the manufacture of goods for sale. These company maintain a manufacturing account.
2. Cost Method: Expenses are the cost of unsold products and are reported as assets. These expenses include wages, electricity in offices outside of the factory (sales and marketing, general administrative offices) are reported immediately as expenses in the accounting period that they are used cost outside of the factory do not
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They act under Section 335 sub-section 1 provides:

For unsuccessful or (dry hole) results, the associated operating cost are immediately changed against revenue for that period.

Acquisition and Mineral Right Prospecting cost associated with pre licensing are incurred in the period prior to the acquisition of legal right to explore for oil and gas in a particular location, such cost include the acquisition of speculative seismic data and expenditures on the subsequent geological and geophysical analysis of the data. Other licensing faces are oil exploration license, oil mining lease license. Oil prospecting license (OPL). In the course of acquiring the right to explore, develop and produce oil or natural gas, expenses relating to either purchase or lease to the right to extract the oil and gas from a property not owned by the company. Acquisition costs also includes any lease bonus payment to the property owner along with legal expenses, and title search, broker and recording cost. Under both SE and FE accounting methods acquisition cost are capitalized

“The financial statement of a company prepared under section 334 of this Decree shall comply with the requirement of schedule 2
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