Which of the Following Statements Is True About Initial Direct

question 39

Multiple Choice

Which of the following statements is true about initial direct costs?

• A)Initial direct costs should always be debited against income by the lessor in the period of the inception of the lease.
• B)Initial direct costs are ownership-type costs such as insurance, maintenance, and taxes.
• C)Initial direct costs of an operating lease should be recorded by the lessor as a prepaid asset.
• D)Initial direct costs of a sales-type lease should be expensed as incurred, and an equal amount of the unearned income should be recognized as income in the same period.

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Definitions:

Ludwig Mies van der Rohe

A pioneering modernist architect known for his minimalist design philosophy summed up by the phrase "less is more."

Less is More

A design principle emphasizing that simplicity and clarity lead to good design, often associated with the minimalist movement.

De Stijl

Dutch, “the style.” An early-20th-century art movement (and magazine), founded by Piet Mondrian and Theo van Doesburg, whose members promoted utopian ideals and developed a simplified geometric style.

Gerrit Thomas Rietveld

A Dutch architect and furniture designer, recognized for his contribution to the De Stijl movement and designs like the Red and Blue Chair.