Which of the Following Statements Regarding Capital Leases Is FALSE

question 37

Multiple Choice

Which of the following statements regarding capital leases is FALSE?

• A)Because capital leases increase the apparent leverage on the firm's balance sheet,firms sometimes prefer to have a lease categorized as an operating lease to keep it off the balance sheet.
• B)The firm does not report the present value of the future lease payments as a liability on the balance sheet.
• C)The asset acquired is listed on the lessee's balance sheet,and the lessee incurs depreciation expenses for the asset.
• D)They are viewed as an acquisition for accounting purposes.

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Definitions:

Critical Values

Specific points on the scale of a test statistic beyond which the null hypothesis is rejected in favor of the alternative hypothesis.

Two-Tailed

A hypothesis test that allows for the possibility of an effect in two directions, either less than or greater than a specified range.

Pearson Correlation

A statistical measure that evaluates the linear relationship between two continuous variables.

Critical Values

Threshold values on the scale of a test statistic beyond which the null hypothesis is rejected.