Which of the Following Statements Is Incorrect

question 2

Multiple Choice

Which of the following statements is incorrect?

• A)The capitalisation of a leased asset increases the value of reported non-current assets and reduces the return on assets ratio.
• B)Recognition of the present value of future lease payments as a liability increases reported current and non-current liabilities.This favourably affects gearing ratios.
• C)The recognition of finance leases may have adverse consequences on the financial statements of a lessee entity.
• D)The different accounting approaches for finance leases and operating leases provide an incentive for managers to misclassify lease arrangements as operating leases.

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Definitions:

Rich Countries

Nations with high gross domestic product (GDP) per capita, indicating significant economic wealth and standard of living.

Poor Countries

Nations characterized by low levels of income, economic activity, and development.

Happiness

A scenario of health and happiness characterized by emotional states stretching from gratification to intense delight.

Genetic Differences

Variations in the DNA sequences among individuals, which contribute to the biological diversity of organisms.