An Operating Lease Compared to a Financial Lease Will Result

question 48

Multiple Choice

An operating lease compared to a financial lease will result in:

• A) higher net income in the early years and no difference in net income in the later years.
• B) higher net income in the early years and lower net income in the later years.
• C) lower net income in the early years and higher net income in the later years.
• D) no difference as the classification of the lease has no effect on net income.

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Definitions:

Year

A period of approximately 365 or 366 days, divided into 12 months, used in the Gregorian calendar to measure the time a complete orbit of the Earth around the Sun takes.

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The activity of engaging in physical exercises on a consistent basis to improve or maintain one's health.