All of the Following Statements Regarding Leases Are True Except

question 89

Multiple Choice

All of the following statements regarding leases are true except:

• A)For a finance lease,the lessee records the leased item as its own asset.
• B)For a finance lease,the lessee amortizes the right-of-use asset acquired under the lease.
• C)Finance leases create a liability on the balance sheet.
• D)Finance leases do not transfer ownership of the asset under the lease,but operating leases often do.
• E)For a short-term lease of a few days or weeks,the lessee records payments as rental expense.

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Definitions:

Downsloping Demand Curves

A graph that illustrates the inverse relationship between the price of a good and the quantity demanded by consumers; as price decreases, the quantity demanded increases.

Inelastic Segment

Part of a demand curve where the quantity demanded changes very little with a change in price, indicating consumers' relative insensitivity to price changes.

Maximum Profits

The highest possible financial gain that a company can achieve in a given period while accounting for all costs and expenses.

Nondiscriminating Monopolist

A monopolist who charges all consumers the same price for a good or service, regardless of the demand or cost conditions.