Which of the Following Is the Best Definition of an Operating

question 113

Multiple Choice

Which of the following is the best definition of an operating lease?

• A) A shorter-term lease where the lessor is responsible for insurance, taxes, and upkeep.
• B) A financial lease in which the lessee sells an asset to the lessor and then leases it back.
• C) A financial lease in which the lessor is the owner for tax purposes. Also called a true lease or a tax lease.
• D) A leveraged lease is a tax-oriented lease involving three parties: a lessee, a lessor, and a lender.
• E) A longer-term, fully amortized lease under which the lessee is responsible for upkeep. Usually not cancellable with-out penalty.

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Definitions:

Prepetition Assets

Assets that an individual or entity possesses before filing for bankruptcy protection.

Automatic Stay

A legal provision that halts all lawsuits, foreclosures, and collection activities against a debtor the moment a bankruptcy petition is filed.

Filing Of A Petition

The act of submitting a document to a court or other authority requesting a legal proceeding.

Debts Discharged

The cancellation of a debtor's obligation to pay back a debt, often occurring through bankruptcy proceedings.