Operating Leases Differ from Capital Leases in That

question 175

Multiple Choice

Operating leases differ from capital leases in that

• A)For a capital lease,the lessee records the lease payments as rent expense,but for an operating lease,the lessee reports the lease payments as depreciation expense.
• B)For an operating lease,the lessee depreciates the asset acquired under lease,but for the capital lease,the lessee does not.
• C)Operating leases create a long-term liability on the balance sheet,but capital leases do not.
• D)Operating leases do not transfer ownership of the asset under the lease,but capital leases often do.
• E)Operating lease payments are generally greater than capital lease payments.

---

Definitions:

Pay Grade

A step or level within an organization's salary structure that determines the amount of pay an employee receives.

Employee Competencies

The range of skills, knowledge, and attributes that are required for an employee to perform their job successfully.

Classification Systems

Methodologies or frameworks used to organize or categorize items, information, or concepts based on shared qualities or characteristics.

Living Wage Laws

Regulations that require employers to pay wages that are sufficient to maintain a decent standard of living for their workers and families.