Which of the following is /are usually correct regarding operating leases? I. The lessor will recoup the entire cost of the leased asset during the term of the original lease. II. The leases are fully amortized. III. The lessee has an obligation under the cancellation option to cancel the lease contract prior to the expiration date. IV. The lessor is responsible for insuring the leased asset. Select one: a. I and III only b. II, III, and IV only c. III and IV only d. IV only

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Which of the following is /are usually correct regarding operating leases?

I. The lessor will recoup the entire cost of the leased asset during the term of the original lease.

II. The leases are fully amortized.

III. The lessee has an obligation under the cancellation option to cancel the lease contract prior to the expiration date.

IV. The lessor is responsible for insuring the leased asset.

Select one:

a.

I and III only

b.

II, III, and IV only

c.

III and IV only

d.

IV only

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