Depreciation Expense Will Be Recorded in the Accounts of the

question 25

Multiple Choice

Depreciation expense will be recorded in the accounts of the

• A)lessee for operating leases
• B)lessor for operating leases
• C)lessor for direct financing leases
• D)lessor for sales-type leases

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Definitions:

Capacity

The legal ability of an individual or organization to enter into a contract, including being of the required age and sound mind.

Exemption Clauses

Provisions in a contract that limit or exclude one party's liability for certain breaches or damages.

Breach of Contract

A violation of any of the agreed terms and conditions of a contract, which can give rise to legal action for damages.

Consideration

Something of value promised to another when making a contract.