Which of the Following Statements Regarding Capital Leases Is False

question 37

Multiple Choice

Which of the following statements regarding capital leases is false?

• A) Because capital leases increase the apparent leverage on the firm's balance sheet, firms sometimes prefer to have a lease categorized as an operating lease to keep it off the balance sheet.
• B) The firm does not report the present value of the future lease payments as a liability on the balance sheet.
• C) The asset acquired is listed on the lessee's balance sheet, and the lessee incurs depreciation expenses for the asset.
• D) They are viewed as an acquisition for accounting purposes.

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