Under the Finance Method of Accounting for Leases, Under ASC

question 47

Multiple Choice

Under the finance method of accounting for leases, under ASC 842, the excess of aggregate rentals over the cost of leased property should be recognized as revenue of the lessor

• A) In increasing amounts during the term of the lease
• B) In constant amounts during the term of the lease
• C) In decreasing amounts during the term of the lease
• D) After the cost of leased property has been fully recovered through rentals

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Definitions:

Supply

The total amount of a good or service available for purchase at any given price level in a market.

Technological Advance

Improvements or innovations in technology that enhance productivity, efficiency, or product quality.

Increase in Supply

A situation where the quantity of a good or service that producers are willing and able to sell, at a given price, rises.

Decrease in Supply

A situation where the quantity of a good or service that producers are willing to offer for sale at a given price level decreases.