Which one of the following does not apply to the lessee of a sale and leaseback arrangement?
A) May have the option to repurchase the asset at the end of the lease term
B) Uses the asset
C) Receives payment for the sale in the form of lease payments
D) Forfeits ownership rights
E) Receives cash from the sale of the asset

Question

Quizplus · Accepted Answer

In a sale and leaseback arrangement, the lessee sells the asset and then leases it back. Therefore, they receive cash from the sale upfront, not in the form of lease payments. Lease payments are made by the lessee to the lessor for the use of the asset.

Which One of the Following Does Not Apply to the Lessee