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.

Question

Andre Foulks · Accepted Answer

Final Answer : D, Explanation :  Finance leases often transfer ownership of the asset to the lessee by the end of the lease term, or provide an option to purchase the asset at a bargain price, distinguishing them from operating leases which typically do not transfer ownership.

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