Oil & Gas
Crude Oil Inventory — Production Recognized
Recording crude oil extracted and placed into storage tanks as inventory.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Crude Oil Inventory | Asset (+) | 5,000,000.00 | - |
| Cost of Production (Lifting Costs Allocated) | Expense (-) | - | 5,000,000.00 |
💡 Accountant's Note
Produced oil enters inventory at its cost of production (lifting costs). Revenue is NOT recognized until the oil is sold and control passes to the buyer. Inventory is carried at the lower of cost or NRV.
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