Asked by Alondra Cardenas on Jun 30, 2024
Verified
The lessee has substantially all of the benefits and risks of ownership in a(n)
A) apartment lease.
B) capital lease.
C) operating lease.
D) operating lease and a capital lease.
Capital Lease
A lease agreement in which the lessee essentially acquires all the risks and rewards of ownership, akin to a financial purchase.
Operating Lease
A leasing agreement for the use of an asset, where the lessee does not assume the risk of ownership.
Benefits and Risks
An assessment of the positive outcomes (benefits) and potential negative outcomes (risks) associated with a decision or action.
- Comprehend the approach to and effects of leases within the realm of financial accounting.
- Identify the criteria for distinguishing a lease as a capital lease or an operating lease.
Verified Answer
Jul 07, 2024
Learning Objectives
- Comprehend the approach to and effects of leases within the realm of financial accounting.
- Identify the criteria for distinguishing a lease as a capital lease or an operating lease.
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