GB 112/212 MANAGERIAL ACC. W/ACCESS >C<
17th Edition
ISBN: 9781260218831
Author: Libby
Publisher: MCG CUSTOM
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Textbook Question
Chapter S, Problem 1MCQ
Defining a Lessor
Which of the following best describes a lessor?
- a. The party that pays rent expense under an operating lease.
- b. The party that owns a leased asset.
- c. The party that services a leased asset under an operating lease.
- d. The party that pays for the right to use a leased asset.
Expert Solution & Answer
To determine
Find the correct option, the option which describes a lessor.
Explanation of Solution
Lease: This is a contractual agreement between two parties, lessor, the owner of the leased asset and the lessee, the person who leases the asset. In this contract, lessor transfers the right to use his assets to lessee for a stipulated period of time, and lessee pays lessor for granting him the right to use the assets.
Justification for correct answer: Lessor is the party in the lease contract who owns the asset and allows the other party to use his asset. So, option (b) is correct answer.
Justification for incorrect answers:
- Option (a) is incorrect answer because lessee is the party which pays rent expense for using the asset of the lessor.
- Option (c) is incorrect answer because lessee is the party which services a leased asset.
- Option (d) is incorrect answer because lessee is the party who pays lessor for granting him the right to use the assets.
Conclusion
Hence, option (b) is the correct answer.
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Chapter S Solutions
GB 112/212 MANAGERIAL ACC. W/ACCESS >C<
Ch. S - Defining a Lessor Which of the following best...Ch. S - Prob. 2MCQCh. S - Prob. 3MCQCh. S - Prob. 4MCQCh. S - Prob. 5MCQCh. S - Prob. 6MCQCh. S - Prob. 1MECh. S - Prob. 2MECh. S - Prob. 3MECh. S - Prob. 4ME
Ch. S - Prob. 1ECh. S - Prob. 2ECh. S - Prob. 3ECh. S - Prob. 4ECh. S - Calculating a Deferred Tax Liability LOS-5 On...Ch. S - Prob. 6ECh. S - Prob. 7ECh. S - Prob. 8ECh. S - Prob. 9ECh. S - Prob. 10ECh. S - Converting Operating Leases to Capital Leases...Ch. S - Converting Operating Leases to Capital Leases...Ch. S - Computing Effective Tax Rates LOS-4 Below is...Ch. S - Prob. 4PCh. S - Prob. 5PCh. S - Prob. 6PCh. S - Analyzing Starbuckss Lease Disclosures The...Ch. S - Analyzing Disneys Income Tax Disclosures The...
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