Which of the Following Correctly Describes the Accounting for Leases

question 114

Multiple Choice

Which of the following correctly describes the accounting for leases?

• A)There are eight criteria used to establish whether the lessor maintains effective control of the leased asset.
• B)A lease asset and a lease liability are initially recognized for both a capital lease and an operating lease.
• C)If none of the criteria used to establish whether the lessor maintains effective control of the leased asset are met,then the lease is classified as a capital lease.
• D)The amount recorded as a lease asset and a lease liability is the sum of the required future lease payments.

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Definitions:

File Folder

A folder or holder used for organizing and storing papers and documents.

Permanent Tracks

Fixed pathways or routes that remain in a constant location over time, often referring to those used in transportation or infrastructure.

Rolling Shelves

Storage units mounted on tracks that allow them to be moved laterally, optimizing space usage and access.

Shelf Filing

A method of organizing files and documents on shelves in an orderly fashion, often used in offices and libraries for easy access and retrieval.