The major accounting difference between a finance lease and an operating lease is that finance leases:
A) involve larger amounts of funds.
B) are for longer periods of time.
C) involve the recognition of assets and liabilities.
D) are cancellable.

Question

Quizplus · Accepted Answer

Finance leases involve the recognition of assets and liabilities on the lessee's balance sheet, while operating leases only involve the recognition of rent expense on the income statement.

The Major Accounting Difference Between a Finance Lease and an Operating