From the lessor's standpoint, all of the following statements are true regarding leasing except that
A)the lease may serve as a marketing tool and thereby increase sales
B)if the residual value of the asset is not guaranteed, the lessor has transferred the risks of residual value decreases to the lessee
C)for sales-type lease agreements, the lessor earns interest in addition to profit from the transfer of the asset
D)the accounting procedures used by a lessor for a sales-type lease are similar to the accounting procedures used for a normal sale of merchandise under a perpetual inventory system

Question

Quizplus · Accepted Answer

In a lease where the residual value is not guaranteed by the lessee, the lessor retains the risks associated with the residual value decreases, not the lessee. This means the lessor is responsible for any loss in value of the leased asset at the end of the lease term.

From the Lessor's Standpoint, All of the Following Statements Are