Which Statement Is Correct

question 1

Multiple Choice

Which statement is correct?

• A)In an operating lease,the lessee uses the asset for most of the asset's useful life.
• B)The lessee expenses the cost of the lease in the period the benefits are received in an operating lease.
• C)An operating lease transfers the risks and rewards from the lessor to the lessee.
• D)In an operating lease,the lessee records an asset for the property being used.

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Definitions:

Expenses

Outflows or using up of assets, or incurring liabilities, as a result of operational activities intended to generate revenue.

Financial Statement

A summary report that quantitatively describes the financial health of a company, including balance sheets, income statements, and cash flow statements.

Accounts

Records that summarize financial transactions pertaining to a business entity’s assets, liabilities, equity, revenues, and expenses.

Increases and Decreases

Terms used to describe the upward and downward movements in financial and non-financial metrics within business operations.