The Lessor Should Report the Lease Receivable for a Sales-Type

question 63

Multiple Choice

The lessor should report the Lease Receivable for a sales-type lease on its balance sheet as

• A)a current asset
• B)a long-term asset
• C)a current asset for the current portion and a long-term asset for the remaining amount
• D)only a note to the financial statements

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Definitions:

Lawn-mowing

The process of cutting grass to a uniform length, typically performed as a maintenance activity for aesthetic and health reasons in gardens and lawns.

Variable Costs

Expenditures that change in direct correlation with the amount of output or production.

Profit-maximizing Output

The level of production at which a firm can achieve the highest possible profit, given its cost structure and the price of its products or services.

Fixed Cost

Costs that do not change with the level of output produced, such as rent or salaries.