Question

On January 1, Smith Industries leased equipment. What type of financial transaction does leasing equipment represent?

a) Revenue generation
b) Asset acquisition
c) Expense reduction
d) Liability increase

Answer 1

Leasing equipment represents asset acquisition in the financial market.

Step-by-step explanation:

Leasing equipment represents asset acquisition in the financial market. When a company leases equipment, it is acquiring an asset that will be used in its operations. The leased equipment is recorded as an asset on the company's balance sheet.