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:

Endo Rule

A guideline in Diels-Alder reactions predicting that the endo product is preferred for thermodynamic or kinetic reasons.

Diels-Alder

A synthetic chemical reaction between a conjugated diene and a substituted alkene, known as the dienophile, to form a cyclic product.

Allyl Bromide

A halogenated compound (C3H5Br), often used as a building block in organic synthesis for introducing allyl groups.

Ethyl Bromide

A colorless, volatile compound used primarily in organic synthesis and as a fumigant; it is an alkyl halide with the formula C2H5Br.