Which of the Following Statements Regarding Leases and Bankruptcy Is

question 14

Multiple Choice

Which of the following statements regarding leases and bankruptcy is false?

• A) Operating and true tax leases are generally viewed as true leases by the courts, whereas capital and non-tax leases are more likely to be viewed as security interests.
• B) By retaining ownership of the asset, the lessor has the right to repossess it if the lease payments are not made, even if the firm seeks bankruptcy protection.
• C) If a lease contract is characterized as a true lease in bankruptcy, the lessor is in a somewhat superior position compared to a lender if the firm defaults.
• D) If the lease is classified as a true lease in bankruptcy, then the lessee retains ownership rights over the asset.

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Definitions:

Interpretive Efficiency

The ability to quickly and accurately understand or make sense of information and situations.

Fundamental Attribution Error

The tendency for people to over-emphasize personality-based explanations for behaviors observed in others while under-emphasizing situational explanations.

Actor-Observer Difference

A tendency to attribute one's own actions to situational factors while attributing others' actions to their dispositions.

Similar-To-Me Effect

A bias where individuals are more favorable towards others who they perceive as similar to themselves in some manner.