The Lessor Capitalizes and Amortizes Initial Direct Costs for All

question 18

Multiple Choice

The lessor capitalizes and amortizes initial direct costs for all types of leases except

• A) sales-type leases.
• B) operating leases.
• C) direct-financing leases.
• D) There are no exceptions.

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Definitions:

Nonsufficient Funds Checks

Nonsufficient funds checks are checks that cannot be processed because the check writer's account does not have enough money to cover the amount.

Bank Reconciliation

The process of matching the balances in an entity's accounting records for a cash account to the corresponding information on a bank statement.

Outstanding Checks

Checks that have been written and recorded in the payer's accounting system but have not yet been cleared or cashed by the recipient.