What Is the Primary Accounting Issue for Lessors

question 49

Multiple Choice

What is the primary accounting issue for lessors?

• A) Off-balance sheet financing.
• B) Revenue recognition and expense allocation over the lease term.
• C) Treating the lease in the same manner as the lessee does.
• D) Determining whether the lease is a sales-type lease or a direct financing lease.

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Definitions:

Standard Markup

A conventional percentage added to the cost price of goods to determine their selling price.

Bundle Pricing

A pricing strategy in which several products or services are packaged together and sold at a single price, often lower than the total cost of purchasing each item separately.

Skimming Strategy

A pricing strategy where a company sets relatively high prices at the launch of a new product to maximize profits from customers willing to pay a premium.

Bundle Packaging

The practice of selling multiple products or services together as a single package deal.