If the Lessor Records Deferred Rent Revenue at the Beginning

question 98

Multiple Choice

If the lessor records deferred rent revenue at the beginning of a lease term, the lease must:

• A) Be a financing lease.
• B) Be a sales-type lease.
• C) Contain a bargain renewal option.
• D) Be an operating lease.

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Definitions:

Total Liabilities

The cumulative amount of all debts and financial obligations a company owes to outside parties.

Accounts Receivable

Receivables from clients to a corporation for merchandise or services that have been supplied but remain unpaid.

Merchandise Inventory

Merchandise inventory represents the goods a company has in stock that are ready to be sold in the normal course of business.

Accounts Payable

Accounts payable are liabilities representing the amounts that a company owes to creditors for purchases or services rendered that have not yet been paid.