While Only Certain Leases Are Currently Accounted for as a Sale

question 73

Multiple Choice

While only certain leases are currently accounted for as a sale or purchase, there is theoretic justification for considering all leases to be sales or purchases. The principal reason that supports this idea is that

• A) all leases are generally for the economic life of the property and the residual value of the property at the end of the lease is minimal.
• B) at the end of the lease the property usually can be purchased by the lessee.
• C) a lease reflects the purchase or sale of a quantifiable right to the use of property.
• D) during the life of the lease the lessee can effectively treat the property as if it were owned.

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Definitions:

Responsibility

The duty or obligation to perform tasks, make decisions, or manage resources in a way that is accountable and trustworthy.

Authority

A recognized power or right, often referring to the ability to make decisions and enforce obedience.

Resource Allocation

The process of distributing available resources among various projects, tasks, or investments in an efficient manner.

Task Conflicts

Disagreements among individuals about the content and outcomes of the task being performed.