Which of the Following Is Not a True Statement Regarding

question 46

Multiple Choice

Which of the following is not a true statement regarding a sale and leaseback?

• A)It occurs when the owner of an asset sells the asset and enters into a lease agreement to lease the asset back.
• B)The lessor and lessee both use the standard criteria for classifying such a lease as operating or capital.
• C)The lessor is the original legal owner and the lessee is the new legal owner.
• D)SFAS No. 13 allows a gain or loss to be immediately recognized in cases where the original owner retains the use of a substantially smaller part of the total asset.

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