The Primary Difference Between a Direct-Financing Lease and a Sales-Type

question 37

Multiple Choice

The primary difference between a direct-financing lease and a sales-type lease under ASC 842 is the

• A) Whether the five lease recognition criteria are met
• B) Amount of the depreciation recorded each year by the lessor
• C) Allocation of initial direct costs by the lessor to periods benefited by the lease arrangements
• D) Manner in which rental receipts are recorded as rental income

---

Definitions:

Brand Strategy

A long-term plan to develop a successful brand; it involves how you plan to communicate your brand messages to your target customers.

Target Audience

The specific group of consumers identified as the intended recipients of a product, service, or marketing campaign.

7 Ps

A marketing theory that extends the original 4 P’s (Product, Price, Place, Promotion) to include People, Processes, and Physical evidence.

Bank Representative

An individual working for a bank who is responsible for interfacing with and assisting customers, offering financial advice, and selling banking products.