A Simplified Representation of the Real World That Is Used

question 167

Multiple Choice

A simplified representation of the real world that is used to explain economic phenomena is a(n)

• A) viewpoint.
• B) model.
• C) assumption.
• D) implication.

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Definitions:

Operating Leases

Operating leases are contractual agreements in which the lessee pays to use an asset for a specific period without gaining ownership, typically used for equipment and vehicles.

Capitalize

The accounting practice of recording a cost/expense as an asset, rather than an expenditure, thereby extending the recognition of its financial impact over the useful life of the asset.

Long-Term Liabilities

Financial obligations of a business that are due for repayment beyond the current fiscal year, including bonds payable, long-term loans, and lease obligations.

Current Liabilities

Financial obligations that a company is expected to pay within one year, including accounts payable, short-term loans, and other similar debts.