Which One of the Following Characteristics Does Not Distinguish Financial

question 33

Multiple Choice

Which one of the following characteristics does not distinguish financial leases from operating leases?

• A)financial lease analysis compares leasing to borrowing.
• B)financial leases are not cancelable.
• C)operating leases involve real physical assets.
• D)operating leases do not extend over the economic life of the asset.

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Definitions:

Years

A unit of time equal to 365 days (or 366 in a leap year), used to measure duration or age.

Compounded Monthly

The process where interest earned on a loan or investment is calculated and added to the principal amount each month, facilitating growth in the investment or debt.

Interest Earned

The income received from investing in financial assets that pay interest, such as bonds or savings accounts.

Deposit

A deposit is a sum of money placed into an account or given to a party as security for a financial transaction, which can be withdrawn or used at a later date.