Which One of the Following Statements Is Correct Concerning an Operating

question 93

Multiple Choice

Which one of the following statements is correct concerning an operating lease?

• A) The leased asset will have a significant residual value at the end of the lease term.
• B) The lease will be recorded as a capital lease on the balance sheet of the lessee.
• C) The lessor can terminate the lease at any time without penalty.
• D) The lease term is generally equal to the economic life of the leased asset.
• E) The lessee is responsible for the maintenance and insurance related to the leased asset.

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Definitions:

Consensus

A general agreement or the collective opinion of a group, often achieved through discussion and consideration of all viewpoints.

Human Bias

Refers to the unconscious or conscious prejudices and preferences that affect decision-making and perception.

Legitimate Power

The authority a person holds as a result of their position or role within an organization, which is recognized and respected by others.

Formal Authority

The power granted to an individual due to their position or role within an organization, enabling them to make decisions and enforce rules.