An operating lease's primary characteristics are:
A)fully amortized, lessee maintain equipment and there is not cancellation clause.
B)not fully amortized, lessor maintains equipment and there is a cancellation clause.
C)fully amortized, lessor maintain equipment and there is a cancellation clause.
D)not fully amortized, lessor maintains equipment and there is not cancellation clause.
E)fully amortized, lessee maintain equipment and lessee can acquire assets at end of lease for
Fair market value.

Question

Quizplus · Accepted Answer

Operating lease is a type of lease agreement where the lessee rents an asset from the lessor for a specific period of time. In an operating lease, the lessor maintains the equipment and there is a cancellation clause. It is not fully amortized as the rental payments cover only a portion of the asset's useful life. The lessee does not have the option to acquire the asset at the end of the lease term.

An Operating Lease's Primary Characteristics Are