1. With an operating lease, the leased asset appears on the balance sheet of: neither the lessor...

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Finance

1. With an operating lease, the leased asset appears on thebalance sheet of:
neither the lessor nor the lessee.
the lessee.
the lessor.
2.
With a finance lease, which party recognizes depreciationexpense on the leased asset?
The lessor.
The lessee.
Both the lessor and the lessee.
3.
Which of the following statements about depreciation isleast accurate?
For a firm with increasing capital expenditures, accelerateddepreciation methods tend to increase both net income andstockholders' equity when compared to straight-linedepreciation.
Return on assets is initially higher using straight-linedepreciation than it is using accelerated depreciation.
If an asset produces a constant stream of net income over itsuseful life and is depreciated using the straight-line method, therate of return on the asset increases over its life.
Thank you in advance.

Answer & Explanation Solved by verified expert

4.5 Ratings (847 Votes)

1 Operating lease is just like a rent where lease expense is considered operating expense in nature Risk are rewards to assets still lies with the lessor Ownership is not transferred in operating lease Therefore the leased asset appears on the balance sheet of lessor 2 Financial lease is kind of financial arrangement in See Answer

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1. With an operating lease, the leased asset appears on thebalance sheet of:neither the lessor nor the lessee.the lessee.the lessor.2.With a finance lease, which party recognizes depreciationexpense on the leased asset?The lessor.The lessee.Both the lessor and the lessee.3.Which of the following statements about depreciation isleast accurate?For a firm with increasing capital expenditures, accelerateddepreciation methods tend to increase both net income andstockholders' equity when compared to straight-linedepreciation.Return on assets is initially higher using straight-linedepreciation than it is using accelerated depreciation.If an asset produces a constant stream of net income over itsuseful life and is depreciated using the straight-line method, therate of return on the asset increases over its life.Thank you in advance.

		For a firm with increasing capital expenditures, accelerateddepreciation methods tend to increase both net income andstockholders' equity when compared to straight-linedepreciation.
		Return on assets is initially higher using straight-linedepreciation than it is using accelerated depreciation.
		If an asset produces a constant stream of net income over itsuseful life and is depreciated using the straight-line method, therate of return on the asset increases over its life.