An operating lease must be disclosed on the ﬁrm's balance sheet, according to generally accepted
accounting principles.

Question

Quizplus · Accepted Answer

Generally accepted accounting principles (GAAP) require that an operating lease be disclosed in the footnotes of a firm's financial statements, but it does not have to be recorded on the balance sheet. This is in contrast to a finance lease, which is required to be recorded on the balance sheet.

An Operating Lease Must Be Disclosed on the ﬁRm's Balance