Assume That Souse Agrees to Lease a New Machine from LAIRD

question 24

Multiple Choice

Assume that Souse agrees to lease a new machine from LAIRD on January 1,2011,for $40,000 per year,paid in advance (i.e.,at the beginning of the year) .Executory costs are $1,000.The lease term is 11 years and the asset's useful life is 10 years.There is no bargain purchase option.The guaranteed residual value is $10,000.Which statement is correct?

• A)The executor costs will be included in the minimum lease payments.
• B)The guaranteed residual will be excluded in the minimum lease payments.
• C)This is an operating lease because there is no bargain purchase option.
• D)This is a finance lease since the lease term is for most of the economic life of the asset.

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Definitions:

Suppression

A conscious effort to control or withhold undesirable emotions, thoughts, or actions.

Cultural Influences

The impact that the beliefs, values, norms, and practices of a culture have on individuals' thoughts, feelings, and behaviors.

Parasympathetic Nervous System

is part of the autonomic nervous system responsible for rest and digestion, reducing heart rate, and increasing intestinal and gland activity.

Suppression

The act of stopping or reducing the intensity or expression of an activity, feeling, or thought, consciously or unconsciously.