Which of the Following Items Is Found on an Income

question 172

Multiple Choice

Which of the following items is found on an income statement?

• A)current assets
• B)cost of goods sold
• C)cash flows from investments
• D)owners' equity

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Definitions:

Sales-Type Lease

A lease agreement in which the lessor recognizes immediate profit on the leased asset, as if it were sold, typically used in capital leasing.

Operating Lease

A contract allowing the use of an asset without transferring ownership rights, typically with shorter terms than a finance lease.

Implicit Interest Rate

This reflects the cost of borrowing, calculated from the lease terms, used to measure the present value of lease payments.

Straight-Line Depreciation

A method of allocating an asset’s cost evenly throughout its useful life.