Direct-Financing Lease (Essay)

question 13

Essay

Direct-financing lease (essay).Explain the procedures used to account for a direct-financing lease.

---

Definitions:

Calls

In finance, refers to an agreement that gives the buyer the right, but not the obligation, to buy a stock, bond, commodity, or other instrument at a specified price within a specific time period.

Step-Variable Cost

Costs that remain fixed over a specific range of production or activity, but jump to a higher level once a certain threshold is exceeded.

Fixed Cost

Expenses that do not change with the level of output or sales, such as rent or salaries.

Mixed Cost

Expenses that contain both fixed and variable components and change in total with the level of activity but not proportionately.