Given Its Importance, How Does the Accounting Profession Determine Whether

question 20

Multiple Choice

Given its importance, how does the accounting profession determine whether a lease is an operating lease or a purchase capital lease?

• A) whether the item being leased is a capital asset or not
• B) whether title is likely to pass at the end of the lease period
• C) by observing what ledger account the transaction was recorded in
• D) by asking whether the asset is to be used short- term or long- term
• E) by determining the intentions of the lessee

---

Definitions:

Federal Government

The national government of a federated state, which holds the authority to govern at a level above individual states or provinces.

Yearly Average

A statistical measure that represents the sum of values over a year divided by the number of values.

Great Depression

The Great Depression was a severe worldwide economic downturn that began in 1929 and lasted until the late 1930s.

Government Farm Subsidies

Financial assistance programs provided by the government to support farmers, stabilize food prices, and ensure a stable food supply.