The Practice of Leasing, Rather Than Buying, Necessary Equipment Can

question 58

True/False

The practice of leasing, rather than buying, necessary equipment can be a source of "off-balance sheet financing."

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Definitions:

Double-Declining-Balance Method

A method of accelerated depreciation that doubles the straight-line depreciation rate, leading to higher depreciation expenses in the initial years of asset use.

Straight-Line Method

A method of allocating the cost of a tangible asset over its useful life in equal periodic amounts.

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its useful life in equal annual amounts, making it the simplest form of depreciation.

Residual Value

The projected worth of an asset upon reaching the conclusion of its operational lifespan.