Question

A financial lease: A) is generally called a capital lease by accountants. B) requires the lessor to maintain the asset. C) is a partially amortized lease. D) is often called a single net lease. E) can generally be cancelled without penalty..

Answer 1

Answer:

A) is generally called a capital lease by accountants, is the correct answer.

Explanation:

It is an alternate way of financing in which the lessor buys an asset on behalf of its customer and the lessee signs a contract to repay the payments in installments.

In this type of lease the finance company has the ownership of the asset during the tenure but all the reward and risk related to the asset are transferred to the lessee. The lessee get the ownership of the asset at the end of the lease term.

Answer 2

Answer:

Option A seems to be the correct approach.

Explanation:

• A financial lease seems to be a contractual contract in which: the lessee requires a property. Consider buying the commodity from the lessor. Mostly during the rental agreement, the lessee seems to be using that income stream.
• The obligation to pay a sequence of installments or leases and the use of the commodity. Although a finance lease becomes capitalized, the financial statement raises when both capital as well as the responsibilities.

The other alternatives in question aren't relevant to something like a particular circumstance. Then the above will have to be a viable substitute.