Which of the following statements concerning leases is true?
A) Finance leases are favored by lessees.
B) The appearance of the account, Right-of-Use Asset, on the balance sheet, signifies an operating lease.
C) The portion of a lease liability expected to be paid in the next year is reported as a current liability.
D) Present value is irrelevant in accounting for leases.

Question

Quizplus · Accepted Answer

The portion of a lease liability expected to be paid in the next year is reported as a current liability. This is due to the fact that it is expected to be paid within the next accounting period. The other statements are false - finance leases are favored by lessors, the appearance of Right-of-Use Asset signifies both operating and finance leases, and present value is crucial in accounting for leases.

Which of the Following Statements Concerning Leases Is True