If the Present Value of Financial Lease Payments Were $100,000

question 8

Multiple Choice

If the present value of financial lease payments were $100,000, this capitalized amount would appear:

• A)As a liability on the lessee's balance sheet
• B)As income on the lessor's income statement
• C)As a liability and as an asset on the lessee's balance sheet
• D)Only on the lessor's financial records

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Definitions:

Total Debts

The cumulative amount of all debts and liabilities a company or individual owes.

Total Assets

The sum of all owned resources (current and non-current assets) that a company possesses, which can be found on its balance sheet.

Assets Turnover

A financial ratio that measures the efficiency with which a company uses its assets to generate sales.

Sales

The activities involved in selling products or services to customers, encompassing strategies and processes for identifying customer needs, closing deals, and after-sales support.