Which Statement Is Correct for the Lessee

question 51

Multiple Choice

Which statement is correct for the lessee?

• A)If the minimum lease payments exceed fair value of the leased asset,the asset will be recorded on the balance sheet at the higher amount.
• B)If the minimum lease payments exceed fair value of the leased asset,the asset will be recorded on the balance sheet at the fair value amount.
• C)If the minimum lease payments are lower that the fair value of the leased asset,the asset will be recorded on the balance sheet at the unguaranteed residual value amount.
• D)If the minimum lease payments are lower that the fair value of the leased asset,the implicit rate must be used.

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Definitions:

Expectancy Theory

A motivation theory that suggests that individuals are motivated to perform if they believe their efforts will lead to favorable outcomes.

Motivational Problems

Challenges or hindrances that affect an individual’s drive to take action or achieve goals.

Cultural Differences

Variations in the practices, traditions, values, and beliefs among different cultures.

Negative Behavioral Consequences

Undesirable outcomes that result from certain actions or behaviors.