Which of the Following Statements Concerning the Accounting for Leases

question 19

Multiple Choice

Which of the following statements concerning the accounting for leases is not true?

• A) The economic impact of a capital lease isn't really any different from buying the asset outright and signing a note payable that will be paid off, with interest, over the life of the asset.
• B) At the inception of a capital lease, the lessee's total assets and total stockholders' equity are both increased for the present value of the lease payments to be made over the life of the lease.
• C) Assets rented under an operating lease are not reflected on the lessee's balance sheet, and the rent expense involved is reported in the income statement as an operating expense.
• D)A capital lease results in the lessee assuming virtually all the benefits and risks of ownership of the leased asset.

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Definitions:

National Labor Relations Act

A foundational US law enacted in 1935 that protects the rights of employees to organize, bargain collectively, and engage in concerted activities for mutual aid or protection.

Direct Dealing

A labor relations strategy where employers interact directly with employees rather than through union representatives.

Intraorganizational Bargaining

The process of negotiation and compromise within an organization, such as between different departments or levels of management, to align goals or strategies.

Collective Bargaining

The process by which employers and unions negotiate the terms of employment, including wages, benefits, and working conditions.