Which of the Following Statements Regarding Leases and Bankruptcy Is

question 43

Multiple Choice

Which of the following statements regarding leases and bankruptcy is FALSE?

• A)Operating and true tax leases are generally viewed as true leases by the courts,whereas capital and non-tax leases are more likely to be viewed as a security interest.
• B)By retaining ownership of the asset,the lessor has the right to repossess it if the lease payments are not made,even if the firm seeks bankruptcy protection.
• C)If a lease contract is characterized as a true lease in bankruptcy,the lessor is in a somewhat superior position than a lender if the firm defaults.
• D)If the lease is classified as a true lease in bankruptcy,then the lessee retains ownership rights over the asset.

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Definitions:

Allocation Of Resources

The process of distributing available resources among various competing needs or projects in an economy.

Five Fundamental Questions

The five fundamental questions refer to key economic questions any economy faces about what goods to produce, how to produce them, for whom to produce, how to accommodate change, and how to promote innovation.

Scarce Supply

A situation where the availability of a product or service is limited relative to the desire or demand for it.

Market System

A market economy characterized by investment, production, and distribution decisions that are influenced by the forces of supply and demand, with the prices of goods and services being established in a system where they are allowed to fluctuate freely.