Which of the Following Statements About Capital Leases Is INCORRECT

question 179

Multiple Choice

Which of the following statements about capital leases is INCORRECT?

• A) Under a capital lease, the lessee's books do not report the leased asset.
• B) A capital lease can transfer title of the leased asset to the lessee at the end of the lease term.
• C) A capital lease contains a bargain purchase option.
• D) Under a capital lease, the lessee records a lease liability at the beginning of the lease term.

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International Financial Reporting Standards, which are designed to bring consistency to accounting language, practices, and statements on a global scale.

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An estimated amount a company anticipates losing due to credit risk or other potential business risks.

Lawsuit

A legal action taken by one person or entity against another person or entity, typically in a court of law, over a dispute.