Which of the Following Statements Concerning Leases Is True

question 18

Multiple Choice

Which of the following statements concerning leases is true?

• A) Finance leases are favored by lessees.
• B) The appearance of the account, Right-of-Use Asset, on the balance sheet, signifies an operating lease.
• C) The portion of a lease liability expected to be paid in the next year is reported as a current liability.
• D) Present value is irrelevant in accounting for leases.

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Definitions:

Foreseen Users

Individuals who are reasonably anticipated to use a product or service, considered by manufacturers and service providers in liability assessments.

Near Privity

A legal doctrine that expands the scope of who can sue for breach of contract to include parties with a close enough relationship to the transaction, though not directly involved.

Negligent

The failure to take reasonable care to avoid causing injury or loss to another person, resulting in legal liability for the resulting damages.

Reasonably Foreseeable

A legal standard referring to events or consequences that a person should anticipate as likely to happen under certain circumstances.