A Capital Leased Asset Would Appear on the Balance Sheet

question 20

Multiple Choice

A capital leased asset would appear on the balance sheet as:

• A)Current liability
• B)Capital Lease Liability
• C)Current asset
• D)Prepaid Lease Expense

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Definitions:

Credit Balance

A situation where the total credits in an account exceed the total debits.

Aging

A method used in accounting to categorize and assess the financial health of receivables or inventory based on the period they have been outstanding or in stock, respectively, to identify potential losses or risks.

Accounts Receivable

Liabilities of customers to a business entity for services or products provided but still awaiting payment.

Bad Debts Expense

An estimated expense that represents accounts receivable that a company does not expect to collect.