If a Lease Is Capitalized, It Has One of the Following

question 48

Multiple Choice

If a lease is capitalized, it has one of the following attributes

• A)It shows up as a liability on the lessor's financial statements
• B)It is debt on the right-hand side of the lessee's balance sheet, and an asset on the left
• C)The lease's present value shows as a liability on the lessee's balance sheet, but not an asset
• D)The lease becomes a capital asset for the lessor, allowing him to capitalize on its value to borrow more

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Definitions:

Operational Planning

The method of outlining strategic aims and targets to more immediate goals and targets, detailing significant milestones, criteria for success, and clarifying how or which part of a strategic plan will be implemented within a specific time frame of operations.

Financial Detail

Pertains to the specific, often numerical, information related to the financial aspects of a business or transaction, including revenues, costs, investments, and profitability metrics.

Outside Investors

Individuals or institutions that are not part of a company's operational management but invest capital into the business.

Firm's Management

The group of individuals responsible for making decisions about the operations, strategy, and financial affairs of a company.