Office Equipment Recorded Under a Capital Lease Containing a Bargain

question 16

Multiple Choice

Office equipment recorded under a capital lease containing a bargain purchase option should be amortized under SFAS No.13

• A)Over the period of the lease using the interest method of amortization
• B)Over the period of the lease using the straight-line method of amortization
• C)In a manner consistent with the lessee's normal depreciation policy for owned assets
• D)In a manner consistent with the lessee's normal depreciation policy for owned assets except that the period of amortization should be the lease term

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Definitions:

Grammatical Rules

Guidelines in a language that dictate how words and phrases should be structured to convey clear and correct meaning.

Functional Fixedness

A mental shortcut that restricts an individual to employing an item solely in its conventional manner, obstructing innovative thinking and the ability to solve problems.

Availability Heuristic

A cognitive bias where people judge the likelihood of events based on how easily examples come to mind.

Elimination-by-aspects Strategy

A decision-making process where choices are sequentially eliminated based on whether they fail to meet certain criteria.