A Lease Under Which a Lessor Owns or Acquires the Assets

question 23

Multiple Choice

A lease under which a lessor owns or acquires the assets that are leased to a given lessee is called a(n)

• A) operating lease.
• B) financial lease.
• C) sale-leaseback arrangement.
• D) direct lease.

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Definitions:

GAAP

Generally Accepted Accounting Principles; a collection of commonly-followed accounting rules and standards for financial reporting.

Operating Segment

A distinct part of a business that engages in business activities which earn revenues, incur expenses, and is regularly reviewed by management.

Chief Operating Officer

A senior executive tasked with overseeing the day-to-day administrative and operational functions of a company.

Revenues

The income that a business receives from its normal business activities, typically from the sale of goods and services to customers.