If, as Part of the Accounting for a Lease, the Company

question 203

Multiple Choice

If, as part of the accounting for a lease, the company debits an asset and credits a liability, then the lease must be a(n) :

• A) purchased lease.
• B) operating lease.
• C) cancelable lease.
• D) capital lease.

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Definitions:

Mortgage Insurance

An insurance policy designed to protect the lender from the risk of the borrower defaulting on a mortgage.

Mortgage Loan

A loan secured by real property through the use of a mortgage note which evidences the existence of the loan and the encumbrance of that realty.

Down Payment

An initial, upfront payment made towards the purchase of a high-value item, like real estate or a vehicle, typically representing a percentage of the total purchase price.

Statute of Frauds

A legal principle that requires certain types of contracts to be written in order to be enforceable.