Which of the Following Statements Regarding Capital Leases Is FALSE

question 37

Multiple Choice

Which of the following statements regarding capital leases is FALSE?

• A)Because capital leases increase the apparent leverage on the firm's balance sheet,firms sometimes prefer to have a lease categorized as an operating lease to keep it off the balance sheet.
• B)The firm does not report the present value of the future lease payments as a liability on the balance sheet.
• C)The asset acquired is listed on the lessee's balance sheet,and the lessee incurs depreciation expenses for the asset.
• D)They are viewed as an acquisition for accounting purposes.

Understand how capital improvements and other expenses paid by tenants are treated for tax purposes.

Recognize the correct depreciation method for residential rental properties.

Identify the classification of income received from partnerships and passive activity rules.

Understand the differentiation between internal and external environmental influences on leadership.

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Definitions:

Gestalt Psychology

A theory in psychology that emphasizes the human mind and behavior as a whole rather than separate parts.

Structuralist Approach

An intellectual movement and method of analysis, rooted in linguistics and psychology, that focuses on elements of human culture and the processes of how they relate to each other to form a structure.

Natural Selection

The basis of evolution; the idea that those who inherit characteristics that help them adapt to their particular environments have a selective advantage over those who do not.

Functionalism

A perspective in psychology focused on how mental and behavioral processes enable an organism to adapt, survive, and thrive.