A Lease That Is Viewed as a Rental for Accounting

question 43

Multiple Choice

A lease that is viewed as a rental for accounting purposes is called a(n) :

• A)operating lease.
• B)finance lease.
• C)true tax lease.
• D)security interest.
• E)direct lease.

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Definitions:

Activity Level

Refers to the volume of production or services activities at any given point or period, often influencing costs and revenues.

Planning Budget

A budget created for a specific level of activity; it helps managers plan the expected revenues, costs, and profits for different levels of operational activity.

Total Variable Cost

The cumulative cost that varies in direct proportion to changes in the level of output or activity, such as raw materials and direct labor.

Total Expenses

The aggregate amount of all costs incurred by a business during a specific period.