Which of the following statements about the characteristics of an operating lease and a financiallease is correct?
A) An operating lease is typically used to acquire assets that have useful lives longer than the term of the lease, while financial leases are used to acquire assets with useful lives shorter than the term of the lease.
B) An operating lease is typically used to acquire assets that have useful lives shorter than the term of the lease, while financial leases are used to acquire assets with useful lives longer than the term f the lease.
C) An operating lease is typically used to acquire assets that have useful lives as long as the term of the lease, while financial leases are used to acquire assets with useful lives shorter than the term of the lease.
D) An operating lease is typically used to acquire assets that have useful lives shorter than the term of the lease, while financial leases are used to acquire assets with useful lives as long as the term of the lease.

Question

Quizplus · Accepted Answer

An operating lease is typically used to acquire assets that have useful lives shorter than the term of the lease, while financial leases are used to acquire assets with useful lives as long as the term of the lease. In an operating lease, the lessor retains ownership of the leased asset and the lessee pays for the right to use the asset for a defined period of time, while in a financial lease, the lessee effectively owns the asset and is responsible for its maintenance and insurance, among other things. Therefore, statement D is the correct one.

Which of the Following Statements About the Characteristics of an Operating