The Appropriate Asset Value Reported in the Balance Sheet by the Lessee

question 132

Multiple Choice

The appropriate asset value reported in the balance sheet by the lessee for an operating lease is:

• A)Present value of the minimum lease payments.
• B)Sum of the minimum lease payments.
• C)Fair value of the asset at the inception of the lease.
• D)Zero,unless a prepayment or accrual is involved.

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Definitions:

Shell Oil

A major global group of energy and petrochemical companies known for exploring for and extracting crude oil and natural gas.

Ask Price

The lowest price at which a seller is willing to sell a security or commodity.

Semi-annual

Occurring twice a year; a term often used in finance to describe payments or interest calculations that happen twice within a year.

Coupon Bond

A type of bond that pays the holder interest at fixed intervals through coupons.