Which of the Following Statements Regarding Leases Is CORRECT

question 157

Multiple Choice

Which of the following statements regarding leases is CORRECT?

• A)Capital leases are favored over operating leases because capital leases lower the debt ratio.
• B)A debit balance in the Leased Asset account on the balance sheet indicates an operating lease.
• C)Title is transferred to the lessee at the end of an operating lease term.
• D)If a lease does not meet one of the four exact criteria provided by U.S. GAAP guidelines, it is classified as an operating lease by default.

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Definitions:

Services

Intangible products such as education, healthcare, and entertainment that are consumed at the point of delivery.

Trade Deficit

A Trade Deficit occurs when a country's imports exceed its exports during a specific period, indicating a negative balance of trade.

Oil Imports

The purchase and transportation of oil from foreign countries, vital for countries that do not produce enough oil to meet domestic demand.

Consumption Habits

Patterns or behaviors of individuals or groups in terms of how they spend money on goods and services.