Which of the Following Statements Is Not True of a Financial

question 7

Multiple Choice

Which of the following statements is not true of a financial lease?

• A)it can be cancelled after the equipment is no longer needed.
• B)it is a source of financing.
• C)it is binding obligation for the lessee.
• D)it extends over most of the economic life of the leased asset.

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Definitions:

Revenue

The aggregate financial gain realized through the sale of products or services that constitute a firm's principal business activities.

Expenses

Costs incurred by a business in the process of earning revenue.

Accounts Payable

Amounts owed by a company to suppliers or vendors for goods or services received that have not yet been paid for.

Accounts Receivable

Accounts receivable represents the money owed to a company by its customers for goods or services that have been delivered or used, but not yet paid for.