Which One of These Statements Is Correct Concerning the Lease

question 41

Multiple Choice

Which one of these statements is correct concerning the lease versus buy decision?

• A) The lessor is primarily concerned with returning the asset at the end of the lease term without incurring any additional charges.
• B) The lessee is primarily concerned about the use of the asset.
• C) If Dell Computer became a lessor of its own computers it would be doing direct leasing.
• D) A firm should always purchase an asset rather than lease it if the asset has a positive salvage value.
• E) Dell Computer would be a captive finance company if it became a lessor of its own computers.

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Definitions:

Disposal of Assets

The sale, retirement, or abandonment of a physical or intangible asset that is part of a company's operations.

AASB 8

An Australian Accounting Standards Board regulation setting out the requirements for the disclosure of operating segments, products and services, geographical areas, and major customers in financial reports.

IFRS 8

An International Financial Reporting Standard that requires particular types of entities (chiefly those with publicly traded securities) to disclose information about their operating segments.

European Parliament

The legislative body of the European Union that is directly elected and works alongside the Council of the European Union to enact legislation.