Initial direct costs are
A) costs incurred by a lessee that are directly associated with negotiating and arranging a lease.
B) expensed in the year of incurrence by the lessor in a financing-type lease.
C) spread over the term of a sales-type lease by the lessee.
D) deferred and allocated over the term of an operating lease in proportion to the amount of rental (lease) income that is recognized.

Question

Quizplus · Accepted Answer

The Answer of Initial direct costs are
A) costs incurred by a lessee that are directly associated with negotiating and arranging a lease.
B) expensed in the year of incurrence by the lessor in a financing-type lease.
C) spread over the term of a sales-type lease by the lessee.
D) deferred and allocated over the term of an operating lease in proportion to the amount of rental (lease) income that is recognized.

Initial Direct Costs Are