Which of the following statements is FALSE?
A)The lessee will always record the liability associated with future cash payments but never an asset associated with the property being leased.
B)Leases can take the form of a capital lease or an operating lease.
C)Some leases are substantially equivalent to purchases.
D)A lease contract creates property rights and financial obligations.
E)Almost any asset could be leased.

Question

Quizplus · Accepted Answer

The statement that the lessee will always record the liability associated with future cash payments but never an asset associated with the property being leased is false. In a capital lease, the lessee records both the liability for future cash payments and the asset being leased on their balance sheet.

Which of the Following Statements Is FALSE