With an Operating Lease, ________

question 63

Multiple Choice

With an operating lease, ________.

• A) the lessee records rent expense and the lessor records rent revenue
• B) the lessee records interest expense and the lessor records interest revenue
• C) the lessee records rent expense and the lessor records interest revenue
• D) the lessee records depreciation expense and the lessor records rent revenue

---

Definitions:

Depression

A severe and prolonged downturn in economic activity, marked by significant declines in income, employment, and production, often more severe than a recession.

Gross Investment

The total amount spent on purchasing or constructing new capital goods over a specific time period, without accounting for depreciation.

Net Investment

Net investment refers to the total amount spent on purchasing new capital minus the depreciation on existing capital, indicating the growth of a company or economy's productive capacity.

Capital Goods

Long-lasting goods acquired and used by businesses to produce other goods and services, contributing to their operational capabilities.