The Primary Difference Between a Direct-Financing Lease and a Sales-Type

question 89

Multiple Choice

The primary difference between a direct-financing lease and a sales-type lease is the

• A) manner in which rental receipts are recorded as rental income.
• B) amount of the depreciation recorded each year by the lessor.
• C) recognition of the manufacturer's or dealer's profit at (or loss) the inception of the lease.
• D) allocation of initial direct costs by the lessor to periods benefited by the lease arrangements.