Asked by Enrique Cuevas on May 22, 2024
Verified
All of the following statements regarding leases are true except:
A) For a finance lease,the lessee records the leased item as its own asset.
B) For a finance lease,the lessee amortizes the right-of-use asset acquired under the lease.
C) Finance leases create a liability on the balance sheet.
D) Finance leases do not transfer ownership of the asset under the lease,but operating leases often do.
E) For a short-term lease of a few days or weeks,the lessee records payments as rental expense.
Finance Lease
A type of lease agreement in which the lessee effectively obtains ownership of the asset by the end of the lease term, usually involving payment of the asset's full value over time.
Lessee
A person or entity who leases property or equipment from another, the lessor, under a lease agreement.
Right-Of-Use Asset
An asset that represents a lessee's right to use an underlying asset for the lease term under an agreement.
- Comprehend the concept of leasing and its effects on financial statements.
Verified Answer
Learning Objectives
- Comprehend the concept of leasing and its effects on financial statements.
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