Which of the Following Statements Regarding the Calculation of the Lessee's

question 65

Multiple Choice

Which of the following statements regarding the calculation of the lessee's depreciation expense for a capital lease is true?

• A)The bargain purchase option price is deducted from the original cost capitalized, and the difference is allocated over the estimated economic life of the asset.
• B)The guaranteed residual value is deducted from the original cost capitalized, and the difference is allocated over the estimated economic life of the asset.
• C)The unguaranteed residual value is deducted from the original cost capitalized, and the difference is allocated over the term of the lease.
• D)The guaranteed residual value is deducted from the original cost capitalized, and the difference is allocated over the term of the lease.

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Definitions:

Numerical Limit

A specified maximum number or quantity allowed or prescribed by regulations or law.

Ambiguous

Lacking clarity or preciseness in meaning, which can lead to uncertainty or varied interpretations.

Legal Heirs

Individuals who are legally entitled to inherit a deceased person's property under the laws of intestacy if there is no will.

Invalid

Not acceptable according to law or void of legal significance; lacking in correctness or truth.