If a Lease Is Non-Cancellable by Either Party,then

question 15

Multiple Choice

If a lease is non-cancellable by either party,then:

• A) it can be neither a finance lease nor an operating lease
• B) it may be either a finance lease or an operating lease
• C) it must be an operating lease
• D) it must be a finance lease

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Definitions:

Fixed Manufacturing Overhead

Costs associated with production that do not vary with the level of output, such as salaries of managers and depreciation of factory equipment.

Deferred

A term indicating that something has been postponed or delayed, often referring to income, taxes, or expenses.

Inventories

Assets held for sale in the ordinary course of business, or materials that will be used in the production of goods to be sold.

Year 2

Typically refers to the second year of a company's operations or performance being analyzed.