When Lessors Account for Residual Values Related to Leased Assets

question 28

Multiple Choice

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

• A)always 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 above are true with regard to lessors and residual values.

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Definitions:

Disclosure System

A regulatory framework requiring companies or individuals to reveal information that could influence decisions made by stakeholders or the public, often related to financial data or potential conflicts of interest.

SEDAR

SEDAR (System for Electronic Document Analysis and Retrieval) is a filing system developed for the Canadian securities industry to facilitate the electronic filing and public dissemination of securities information.

Investment Advisors

Professionals who provide advice on investment decisions, often related to securities such as stocks, bonds, and mutual funds.

Registration Requirement

A legal or regulatory condition mandating the official recording of an item, event, or transaction before it becomes effective or valid.