Initial Direct Costs Are Recorded as Assets and Amortized Over

question 183

Multiple Choice

Initial direct costs are recorded as assets and amortized over the term of the lease in ________.

• A)an operating lease
• B)a capital lease
• C)a sales-type lease
• D)a direct financing lease

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Definitions:

Negotiable Instrument

A written document guaranteeing the payment of a specific amount of money either on demand or at a set time, with the payer named on the document.

Agreed

The state of mutual consent or acknowledgement about terms, conditions, or proceedings by all parties involved.

Acceptor

In financial transactions, particularly in negotiable instruments, the party who agrees to pay a bill of exchange.

Unconditional Promise

A commitment or guarantee without any stipulations or requirements, fully binding upon the issuer.