Which of the Following Amortization Policies Is Correct for a Capital

question 39

Multiple Choice

Which of the following amortization policies is correct for a capital lease of both land and buildings that transfers title or contains a bargain purchase option?

• A) The total capitalized cost of the lease less any expected residual value is allocated over the expected economic life of the assets.
• B) The total capitalized cost of the lease less any expected residual value is allocated over the lease term.
• C) An amount is assigned to Leased Buildings that is depreciated over the lease term, and the amount assigned to Leased Land is not depreciated.
• D) An amount is assigned to Leased Buildings that is depreciated over the expected economic life of the asset, and the amount assigned to Leased Land is not depreciated.

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Definitions:

Additional Sales

Sales that occur in addition to the primary product or service being offered, often as a result of upselling or cross-selling strategies.

Follow-Up Step

An action taken after an initial meeting, call, or interaction to maintain contact and advance towards achieving the desired outcome.

Customer Satisfaction

Feelings toward the purchase.

Buying Decision

The process of deciding whether to purchase a product or service, influenced by various factors.