Elaina Company Had the Following Financial Results for Last Month

question 31

Multiple Choice

Elaina Company had the following financial results for last month.What type of responsibility center do these results reflect?

• A)Profit center
• B)Revenue center
• C)Investment center
• D)Cost center

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Definitions:

Sales-Type Leases

Leases where the lessor recognizes immediate profit on the transaction, similar to a sale, typically in equipment or vehicle leasing.

Direct-Financing Leases

Direct-Financing Leases are lease agreements where the lessor essentially acts as a financier, purchasing an asset and leasing it to the lessee, without assuming risk of ownership.

Capital Lease

A lease classified as a financial transaction where the lessee effectively buys an asset and finances it over the lease term.

Operating Lease

An agreement that permits the utilization of an asset without owning it, usually with a shorter duration than a finance lease.