While only certain leases are currently accounted for as a sale or purchase, there is theoretical justification for considering all leases to be sales or purchases.The principle reason that supports this idea is that:
A)during the life of the lease, the lessee can effectively treat the property as if it were owned by the lessee.
B)all leases are generally for the economic life of the property and the residual value of the property at the end of the lease is minimal.
C)at the end of the lease, the property usually can be purchased by the lessee.
D)a lease reflects the purchase or sale of a quantifiable right to the use of the property.

Question

Quizplus · Accepted Answer

A lease reflects the purchase or sale of a quantifiable right to the use of the property, which aligns with the concept of a sale or purchase transaction.

While Only Certain Leases Are Currently Accounted for as a Sale