Which of the Following Statements Is FALSE

question 18

Multiple Choice

Which of the following statements is FALSE?

• A)Leasing allows the party best able to bear the risk to hold it.For example,small firms with a low tolerance for risk may prefer to lease rather than purchase assets.
• B)When the lessor is the manufacturer,a lease in which the lessor bears the risk of the residual value can improve incentives and lower agency costs.
• C)For leases in which the lessor retains a substantial interest in the asset's residual value,the lessee has more of an incentive to take proper care of an asset that is leased rather than purchased.
• D)Whether they appear on the balance sheet or not,lease commitments are a liability for the firm.

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Definitions:

Print Materials

Refers to documents, brochures, books, and other materials that are printed on paper and intended for physical distribution.

Planning Process

A systematic approach to setting goals, developing strategies, and outlining tasks and schedules to achieve those goals.

Evaluation

The process of assessing or judging the value, nature, or quality of something, often to inform decisions or improvements.

Learning Strategies

Techniques, methods, or approaches employed to facilitate the process of gaining knowledge, skills, or comprehension.