Operating Leases Are Treated as

question 72

Multiple Choice

Operating leases are treated as

• A)increases in liabilities for both the lessor and the lessee.
• B)a sale if the leased asset has been transferred from the lessor to the lessee.
• C)capital leases by the lessee.
• D)rental expense by the lessee.

---

Definitions:

Payments

Transactions or transfers of money that are made to settle a debt or an account.

Double-Entry Bookkeeping System

A method of accounting where every transaction is recorded in at least two accounts, with one account being debited and another credited, ensuring the accounting equation balances.

Single-Entry System

An accounting method where each financial transaction is recorded with only one entry, making it simpler but less detailed than double-entry systems.

Accounting Program

An educational curriculum designed to prepare students for careers in financial reporting, auditing, tax, and management accounting.