When Lessors Account for Residual Values Related to Leased Assets

question 97

Multiple Choice

When lessors account for residual values related to leased assets, they

• A) include the residual value because they always assume the residual value will be realized.
• B) include the unguaranteed residual value in sales revenue.
• C) recognize more gross profit on a sales-type lease with a guaranteed residual value than on a sales-type lease with an unguaranteed residual value.
• D) All of the answers are true with regard to lessors and residual values.

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Definitions:

Critical Thinking

The objective analysis and evaluation of an issue in order to form a judgment, involving skepticism and questioning of accepted conclusions.

Interpersonal

Relating to interactions and relationships between people.

Personal Trait

An individual's characteristic pattern of thinking, feeling, or behavior.

Easing Conflict

Techniques or strategies used to reduce tension and resolve disagreements in a peaceful manner.