Certain Types of Leases, Called Capital Leases, Allow the Lessee

question 179

True/False

Certain types of leases, called capital leases, allow the lessee to account for the transaction as a rental.

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Definitions:

Operating Income

This is the profit realized from a business's operations, calculated by subtracting operating expenses from gross profit.

Total Contribution Margin

The difference between total sales revenue and total variable costs, indicating the amount available to cover fixed expenses and generate profit.

Operating Leverage

A measure of how sensitive net operating income is to a given percentage change in revenue, indicating the proportion of fixed versus variable costs.

Income Statement

A financial report that shows a company's revenues, expenses, and profit or loss over a specific period.