Which of the Following Is Correct with Respect to Finance

question 14

Multiple Choice

Which of the following is correct with respect to finance leases?

• A) A finance lease generally involves three parties instead of two.
• B) A finance lessor supplies the goods.
• C) The finance lessor typically has special expertise as to the goods.
• D) All of these are correct.

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Definitions:

Cash Dividends

A portion of a company's earnings that is paid out to shareholders, typically in the form of cash.

Indirect Method

A approach used in cash flow statements to adjust net income for changes in non-cash accounts to determine net cash from operating activities.

Operating Activities

Operating activities include the primary revenue-generating activities of an organization as reflected in its cash flow.

Inventory Account

An account representing the total cost of all unsold goods held by a company, including raw materials, work-in-progress, and finished goods.