If the Lessor Records Deferred Rent Revenue at the Beginning

question 12

Multiple Choice

If the lessor records deferred rent revenue at the beginning of a lease term,the lease must:

• A)Be a direct financing lease.
• B)Be a sales-type lease.
• C)Contain a bargain renewal option.
• D)Be an operating lease.

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Definitions:

Utility

A measure of satisfaction or value that consumers receive from consuming goods and services.

Endowment Effect

The tendency people have to place higher valuations on items they possess (are endowed with) than on identical items that they do not possess; perhaps caused by loss aversion.

Behavioral Economists

Economists who study how psychological, social, cognitive, and emotional factors affect the economic decisions of individuals and institutions.

Inconsistent Anchoring

A cognitive bias where individuals rely too heavily on an initial piece of information (anchor) to make subsequent judgments but inconsistently adjust away from that anchor.