Which of the following would be considered an executory cost?
A) Minimum lease payments
B) Interest expense incurred
C) Bargain purchase option
D) Maintenance costs

Question

Quizplus · Accepted Answer

Executory costs are ongoing costs that are associated with a lease or contract that are not fixed at the time of the agreement. These costs are not yet due and payable, and are subject to change based on future events. Maintenance costs are an example of an executory cost, as they are ongoing expenses that the lessee is responsible for during the lease term. Minimum lease payments, interest expense incurred, and bargain purchase options are not considered executory costs as they are specific, fixed amounts agreed upon at the time of the lease agreement.

Which of the Following Would Be Considered an Executory Cost