Which of the following statements regarding operating leases is false?
A) They are also called a finance leases.
B) The lease is viewed as a rental for accounting purposes.
C) The lessee reports the entire lease payment as an operating expense.
D) They are disclosed in the footnotes of the lessee's financial statements.

Question

Quizplus · Accepted Answer

Operating leases are not called finance leases. Finance leases are a type of capital lease where the lessee assumes ownership of the asset at the end of the lease term, while operating leases are short-term leases in which the lessor retains ownership of the asset. The other statements regarding operating leases are true - they are viewed as a rental for accounting purposes, the lessee reports the entire lease payment as an operating expense, and they are disclosed in the footnotes of the lessee's financial statements.

Which of the Following Statements Regarding Operating Leases Is False