The costs that (a) are associated directly with consummating a lease, (b) are essential to acquire the lease, and (c) would not have been incurred had the lease agreement not occurred, are referred to as:
A) Initial direct costs.
B) Consummating expenses.
C) Lease acquisition expenses.
D) Nonlease components.

Question

Quizplus · Accepted Answer

The costs described in the question are commonly known as initial direct costs in lease accounting. These costs typically include expenses such as legal fees, commissions, and other costs that are incurred in order to obtain and initiate a lease agreement.

The Costs That (A) Are Associated Directly with Consummating a Lease