Which of the Following Is FALSE,concerning Operating Leases

question 10

Multiple Choice

Which of the following is FALSE,concerning operating leases?

• A) It is recorded as present value of lease on the balance sheet.
• B) It does not have any real effect the balance sheet.
• C) It must not extend for at least 75 percent of the asset's life.
• D) It is usually the preferred form of accounting for leases.

---

Definitions:

Notes Payable

Liabilities represented by written promises to pay specific sums of money at future dates, typically evidenced by formal instruments of credit.

Accounts Payable

Liabilities to creditors for goods or services purchased on credit, representing obligations that a company needs to pay off in the near term.

Interest Expense

The cost incurred by an entity for borrowed funds, recognized as an expense in the income statement over the period the funds are borrowed.

Unearned Revenue

Money received by a company for services or products which have not yet been delivered or performed.