Asked by Timothy Robinson on May 17, 2024
Verified
Operating leases
A) are reported on the balance sheet as an intangible asset.
B) are,in essence,the acquisition of an asset using debt.
C) allow companies to take advantage of various tax benefits
D) have a lease term of one year or less.
Operating Leases
Lease agreements that allow for the use of an asset but do not confer ownership rights of the asset to the lessee.
Intangible Asset
An asset without physical substance that provides economic benefit, such as patents, copyrights, trademarks, and goodwill.
Lease Term
The duration for which a lease agreement is effective, specifying the start and end dates.
- Accurately recognize and categorize intangible assets.
Verified Answer
DO
Dominique OglesbyMay 21, 2024
Final Answer :
D
Explanation :
Operating leases have a lease term of one year or less. Option A is incorrect because operating leases are not reported on the balance sheet as an intangible asset. Option B is incorrect because operating leases are not considered as debt. Option C is also incorrect because it is not the main advantage of operating leases.
Learning Objectives
- Accurately recognize and categorize intangible assets.