Which of the Following Statements Is Not True Relating to a Capitalized

question 42

Multiple Choice

Which of the following statements is not true relating to a capitalized (capital) lease?

• A)A capital lease is handled as if the lessee bought the asset.
• B)The leased asset is in the fixed assets and the related obligation is included in liabilities.
• C)On the balance sheet,the capitalized asset amount will not usually agree with the capitalized liability amount because the liability is reduced by payments,and the asset is reduced by depreciation taken.
• D)Usually,a company depreciates capitalized leases faster than payments are made.
• E)On the balance sheet,the capitalized asset amount will usually be higher than the capitalized liability amount.

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Definitions:

Securities Act

A U.S. law enacted in 1933 that regulates the offer and sale of securities to protect investors against fraud.

Pharma Corporation

A company involved in the development, production, and marketing of pharmaceutical drugs and medications.

Financial Information

encompasses data related to the monetary aspects of an individual or organization, such as assets, liabilities, income, and expenses.

Securities Act

A federal law enacted in 1933 that governs the primary issuance of securities (stocks, bonds) to the public, aiming to ensure transparency and prevent fraud in the securities market.