Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

3. Accrual Accounting Concepts

Revenue Recognition and Expense Recognition

Financial Accounting

3. Accrual Accounting Concepts

Revenue Recognition and Expense Recognition

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

A single lease expense is recognized on the income statement for which type of lease under U.S. GAAP?

Operating leases

Finance leases

Direct financing leases

Sales-type leases

Previous problemNext problem

Verified step by step guidance

Understand the types of leases under U.S. GAAP: Operating leases, Finance leases, Direct financing leases, and Sales-type leases. Each has distinct accounting treatments.

Recall that under U.S. GAAP, operating leases require a single lease expense to be recognized on the income statement. This expense is typically recorded as a straight-line expense over the lease term.

For Finance leases, Direct financing leases, and Sales-type leases, the accounting treatment involves separating interest expense and amortization of the leased asset, resulting in multiple components on the income statement.

Focus on the key characteristic of operating leases: they do not transfer ownership or significant risks and rewards of the leased asset to the lessee, which is why a single lease expense is recognized.

Conclude that the correct answer is 'Operating leases,' as they are the only type of lease under U.S. GAAP where a single lease expense is recognized on the income statement.