Which of the Following Is a Difference Between a Direct-Financing

question 85

Multiple Choice

Which of the following is a difference between a direct-financing lease and a sales-type lease?

• A) Unlike a direct-financing lease, a sales-type lease includes a manufacturer's or a dealer's profit or loss.
• B) Unlike in a direct-financing lease, the depreciation expense on the leased asset in a sales-type lease is recorded in the accounts of the lessor.
• C) Unlike in a sales-type lease, the lessee in a direct-financing lease recognizes a right-of-use asset and a lease liability at the commencement of the lease.
• D) Unlike a sales-type lease, a direct-financing lease involves the transfer of ownership to the lessee.

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Definitions:

Bright Side

Often refers to the optimistic perspective of a situation, focusing on its positive aspects.

Liquidated Debt

A debt whose amount has been determined and acknowledged by both the debtor and the creditor.

Accord And Satisfaction

A legal contract wherein a dispute is settled by the parties agreeing and performing on a new obligation which differs from the original agreement.

Unliquidated Debt

Debt for which the specific value has not been determined, often because the exact amount depends on future events or conditions.