All of the Following Statements Regarding Leases Are True Except

question 94

Multiple Choice

All of the following statements regarding leases are true except:

• A)For a capital lease the lessee records the leased item as its own asset.
• B)For a capital lease the lessee depreciates the asset acquired under the lease,but for an operating lease the lessee does not.
• C)Capital leases create a long-term liability on the balance sheet,but operating leases do not.
• D)Capital leases do not transfer ownership of the asset under the lease,but operating leases often do.
• E)For an operating lease the lessee reports the lease payments as rental expense.

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Definitions:

Stock Options

Financial incentives given to employees, granting them the right to buy the company's stock at a set price in the future, typically aimed at aligning their interests with the company's performance.

Securities and Exchange Commission

A U.S. federal agency responsible for regulating the securities industry, including enforcing federal securities laws and regulating securities exchanges.

Executive Compensation

The financial and non-financial rewards given to senior management and executives of a company, which may include salary, bonuses, stock options, and other benefits.

Company's Performance

The overall effectiveness and success of a company in achieving its objectives, often measured through financial, operational, and customer satisfaction metrics.