An operating lease's primary characteristics are:
A)fully amortized, lessee maintains equipment and there is no cancellation clause.
B)not fully amortized, lessor maintains equipment and there is a cancellation clause.
C)fully amortized, lessor maintains equipment and there is a cancellation clause.
D)not fully amortized, lessor maintains equipment and there is not cancellation clause.
E)fully amortized, lessee maintains equipment and lessee can acquire assets at end of lease for fair market value.

Question

Quizplus · Accepted Answer

An operating lease is not fully amortized, meaning that payments do not cover the full cost of the equipment. The lessor (owner of the equipment) typically maintains the equipment, and there is a cancellation clause that allows the lessor to terminate the lease early under certain conditions.

An Operating Lease's Primary Characteristics Are