Which of the Following Statements Regarding Leases Is false

question 185

Multiple Choice

Which of the following statements regarding leases is false?

• A) Lease agreements are a popular form of financing the purchase of assets because leases do not require a large initial outlay of cash.
• B) Accounting recognizes two types of leases-operating and capital leases.
• C) If a lessor classifies a lease as a capital lease, then the lessee records a lease liability on its balance sheet.
• D) If a lease is classified as an operating lease, the lessee records a lease liability on its balance sheet.

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Definitions:

Manufacturing Organization

An entity engaged in the transformation of raw materials or components into finished products through the use of labor, machinery, and processes.

Centre-of-Gravity Method

A technique used in location planning that minimizes transportation costs by considering geography and volumes to find an optimal location.

Distribution Centre Locations

Sites selected for warehouses or facilities where goods are received, stored, and then distributed to retailers or customers.

Service Locations

Sites selected for providing services to customers, often determined based on accessibility and demand.