Which of the Following Statements Is False

question 40

Multiple Choice

Which of the following statements is false?

• A) If the lease is deemed to be a true lease, the firm is assumed to have effective ownership of the asset and the asset is protected against seizure.
• B) Although the legal ownership of the asset resides with the lessor, in a non-tax lease the lessee receives the depreciation deductions.
• C) The treatment of leased property in bankruptcy will depend on whether the lease is classified as a security interest or a true lease by the bankruptcy judge.
• D) In a non-tax lease, the interest portion of the lease payment is interest income for the lessor.

---

Definitions:

Misrepresentation

A false statement of fact made by one party to another, which has the effect of inducing that party into a contract.

Actual Fraud

Actual fraud refers to intentional deception or misrepresentation made by one party with the knowledge of its falsehood, intending to persuade another party to part with something of value or to surrender a legal right.

Constructive Fraud

A situation where dishonesty is presumed by the nature of the transaction, despite the absence of intent to deceive.

Innocent Misrepresentation

A false statement made without knowledge of its falsity, leading another to enter into a contract they otherwise might not have.