The Appropriate Asset Value Reported in the Balance Sheet by the Lessee

question 73

Multiple Choice

The appropriate asset value reported in the balance sheet by the lessee for an operating lease is:

• A) Present value of the lease payments.
• B) Sum of the lease payments.
• C) The lessor's book value of the asset at the beginning of the lease.
• D) Zero, unless a prepayment or accrual is involved.

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Definitions:

Decimal

Numbers that are expressed as a fraction of a part using 10 as its base number; it also refers to the period used to separate a whole number from a fraction, as in 10.2, otherwise read as “ten and two-tenths.”

Fraction

A numerical quantity that is not a whole number, representing a part of a whole.

Base Number

A mathematical value serving as a foundational digit in a numbering system, determining its counting process, such as 2 in binary or 10 in decimal.

Dosages

The prescribed amount and frequency of medication intake or drug administration.