SFAS No 13 Identifies Four Capitalization Tests That Are Now Applicable

question 1

True/False

SFAS No. 13 identifies four capitalization tests that are now applicable to both lessees and lessors.

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Definitions:

Straight-Line Depreciation

An operation for dividing the expense of a solid asset through its functional duration in even yearly sums.

Simple Rate of Return

A calculation that estimates the profitability of an investment, dividing annual incremental net operating income by the initial investment cost.

Cash Operating Costs

Expenses a business incurs through its operations that require cash payments, excluding non-cash expenses like depreciation.

Automating Process

The method of using technology to perform tasks with minimal human intervention.