Initial Direct Costs Are

Multiple Choice

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.