Many States Provide That a Lease for a Term Exceeding

question 42

Multiple Choice

Many states provide that a lease for a term exceeding __________ must be in writing.

• A) three (3) months
• B) six (6) months
• C) one (1) year
• D) three (3) years

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Definitions:

Journal Entry

The record of a financial transaction in an accounting journal, showing the accounts and amounts debited and credited.

Adjusting Entries

Entries necessary at the end of the accounting period to measure all revenues and expenses of that period and update assets and liabilities.

Effective-Interest Method

A technique used in accounting to amortize the discount or premium on bonds payable over the life of the bonds more accurately than the straight-line method.

Bonds

Bonds are fixed-income securities that represent a loan made by an investor to a borrower, typically corporate or governmental, which pays periodic interest payments and the return of the principal at maturity.