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.

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Definitions:

Standard Deviations

An indicator of how widely values in a dataset are spread out from the average, showing the degree to which these numbers vary from their mean.

Nominal Data

A classification of categorical variables that do not have a natural order or rank.

Interval Data

A type of quantitative data that involves measurements where the difference between two values is meaningful, but there is no true zero point.

Bimodal Data

Data that has two different modes, or peaks, in its frequency distribution.