Operating leases are treated as
A)increases in liabilities for both the lessor and the lessee.
B)a sale if the leased asset has been transferred from the lessor to the lessee.
C)capital leases by the lessee.
D)rental expense by the lessee.

Question

Quizplus · Accepted Answer

Operating leases are treated as rental expense by the lessee. This means the lessee reports the lease payments as an expense on their income statement rather than adding the leased asset to their balance sheet as they would with a capital lease.

Operating Leases Are Treated as