An Accounting Principles Board Opinion Was Concerned with Disclosure of Accounting

question 41

Multiple Choice

An Accounting Principles Board Opinion was concerned with disclosure of accounting policies. A singular feature of this particular opinion is that it

• A) Calls for disclosure of every accounting policy followed by a reporting entity
• B) Applies to immaterial items whereas most opinions are concerned solely with material items
• C) Applies also to accounting policy disclosures by not-for-profit entities, whereas most opinions are concerned solely with accounting practices of profit-oriented entities
• D) Prescribes a rigid format for the disclosure of policies to be reported upon

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Definitions:

Financial Lease

A type of lease in which the lessee has use of the asset for most of its useful life and the lease payments cover the full cost of the asset, effectively transferring the risks and rewards of ownership.

Financial Lease

A type of lease in which the lessee has use of the asset for most of its useful life, and the lease payments are designed to cover the lessor's purchase costs and provide a profit.

Lessor

The group that provides a property or asset for lease to another group, identified as the lessee.

Nonrecourse Basis

Nonrecourse Basis refers to a type of financing or lending where the borrower is not personally liable beyond the collateral for the loan.