Asked by Gwyneth Paulino on Jul 20, 2024
Verified
A financial lease is generally cancellable without penalty if the lessee provides 30 days advance notice.
Financial Lease
A long-term lease agreement where the lessee assumes both the rights and risks of asset ownership, effectively treating it as a purchase for accounting purposes.
Cancellable Without Penalty
This term refers to an agreement or contract that can be ended or cancelled without any financial penalties being incurred by the party seeking to terminate the agreement.
- Become familiar with the distinction between capital (financial) leases and operating leases.
Verified Answer
BN
Brittanny NamwisesJul 21, 2024
Final Answer :
False
Explanation :
A financial lease is typically non-cancellable, meaning the lessee is obligated to make payments for the entire lease term, and cannot cancel the lease early without penalty.
Learning Objectives
- Become familiar with the distinction between capital (financial) leases and operating leases.