Which of the following best describes current standards in accounting for leases?
A) Leases are not capitalized.
B) Leases similar to instalment purchases are capitalized.
C) Only long-term leases are capitalized.
D) All leases are capitalized.

Question

Quizplus · Accepted Answer

Leases that are similar to installment purchases, meaning they transfer substantially all the risks and rewards of ownership to the lessee, are capitalized. This approach aligns with the principle that the economic substance of a transaction should be reflected in the financial statements.

Which of the Following Best Describes Current Standards in Accounting