Which of the following statements about capital leases is INCORRECT?
A)Under a capital lease, the lessee does not report the leased asset on the financial statements.
B)A capital lease can transfer title of the leased asset to the lessee at the end of the lease term.
C)A capital lease may contain a bargain purchase option.
D)Under a capital lease, the lessee records a lease liability at the beginning of the lease term.

Question

Quizplus · Accepted Answer

Under a capital lease, the lessee does report the leased asset on the financial statements, as it is treated similarly to an asset purchase.

Which of the Following Statements About Capital Leases Is INCORRECT