If a Lease Is Capitalized,how Is It Reported Under International

question 8

Multiple Choice

If a lease is capitalized,how is it reported under International Accounting Standards IAS 17?

• A)It shows up as a liability on the lessor's financial statements.
• B)It is a 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 as an asset.
• D)The lease becomes a capital asset for the lessor, allowing the firm to capitalize on its value to borrow more.

---

Definitions:

Stock Markets

Markets where shares of publicly held companies are issued and traded, serving as a platform for buying and selling stocks.

Milton Friedman

An influential American economist known for his strong belief in free-market capitalism and for challenging Keynesian economics.

Lottery

A form of gambling that involves drawing numbers at random for a prize, often run by states or organizations as a way to raise funds.

Federal Reserve

The central banking system of the United States, responsible for implementing the country's monetary policy.