Which of the Following Statements Regarding Leases and Bankruptcy Is

question 43

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 a security interest.
• 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 than 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:

Extralegal Force

Force used by an authority or individual that is not sanctioned by law, often implicating a violation of legal or ethical standards.

Deliberate

The process of carefully considering or discussing something before making a decision.

Wrongful Use

The incorrect, unethical, or illegal application or operation of something, often leading to harm or violation of rights.

Whistle-Blower

An individual who exposes illegal, unethical, or wrongful actions within an organization, often facing personal risk in doing so.