Which of the Following Statements Regarding Leases Is False

question 25

Multiple Choice

Which of the following statements regarding leases is false?

• A)Lease agreements are a popular form of financing the purchase of assets because leases do not require a large initial outlay of cash.
• B)Accounting recognizes two types of leases--operating and capital leases.
• C)If a lessor classifies a lease as a capital lease, then the lessor records a lease liability on its balance sheet.
• D)If a lease is classified as an operating lease, the lessee records an asset on its balance sheet.

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Definitions:

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