Which One of the Following Statements Concerning Operating and fiNancial

question 214

Multiple Choice

Which one of the following statements concerning operating and financial leases is correct?

• A) A firm that is restricted from issuing more debt by a bond covenant, should enter a financial lease rather than an operating lease.
• B) An operating lease increases the debt-equity ratio of a firm.
• C) An operating lease must be reported on the balance sheet of the lessee.
• D) A financial lease reduces the net equity in a firm.
• E) A financial lease increases the total debt of a firm.

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Definitions:

Conservation

A cognitive ability, described by Piaget, to understand that certain properties of objects remain the same despite superficial changes in appearance or arrangement.

Bullying

The act of repeatedly causing harm or discomfort to another individual, often manifesting through physical, verbal, or social means.

Circadian Rhythms

Biological processes that display an endogenous, entrainable oscillation of about 24 hours, influencing sleep patterns, feeding behavior, hormone production, and other bodily functions.

Photoperiodism

The physiological response of organisms to the length of day or night, affecting behaviors such as flowering in plants and mating in animals.