Which of the Following Accounts Would Not Appear on the Balance

question 15

Multiple Choice

Which of the following accounts would not appear on the balance sheet of a lessee company recording a capital lease?

• A) Accumulated depreciation on the leased asset
• B) Lease obligation in the current liability section
• C) Lease obligation in the long-term liability section
• D) Rent expense on the income statement

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Definitions:

Accounts Receivable Turnover Ratio

A financial metric that measures how efficiently a company collects cash from its credit sales by dividing net credit sales by the average accounts receivable during a period.

Customer Payment Patterns

The tendencies or behaviors observed in how customers make their payments, which can vary in timing and method.

Debt Ratio

The debt ratio is a financial ratio that measures the extent of a company’s leverage, indicated by dividing total liabilities by total assets.

Quick Ratio

A liquidity ratio that measures a company's ability to meet its short-term obligations with its most liquid assets, excluding inventories.