Operating Leases Differ from Capital Leases in That

question 175

Multiple Choice

Operating leases differ from capital leases in that

• A)For a capital lease,the lessee records the lease payments as rent expense,but for an operating lease,the lessee reports the lease payments as depreciation expense.
• B)For an operating lease,the lessee depreciates the asset acquired under lease,but for the capital lease,the lessee does not.
• C)Operating leases create a long-term liability on the balance sheet,but capital leases do not.
• D)Operating leases do not transfer ownership of the asset under the lease,but capital leases often do.
• E)Operating lease payments are generally greater than capital lease payments.

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Definitions:

Autonomy

The degree of freedom and independence an employee has in their job to make decisions and control their work processes.

Evaluate Job Performance

The process of assessing how well an employee performs their job duties and responsibilities.

Environmental Considerations

The influence of the external environment on job design; includes employee ability, availability, and social expectations.

External Environment

Consists of all factors outside an organization that can affect its operations and performance, including economic, legal, technological, and social conditions.