A lease where the plan is temporary use of an asset by the lessee with continued ownership of the asset by the lessor is called a(n):
A) capital lease.
B) preferred lease.
C) operating lease.
D) purchased lease.

Question

Quizplus · Accepted Answer

An operating lease is a type of lease agreement where the lessee (user) leases an asset from the lessor (owner) for a limited period of time, after which the asset is returned to the lessor. The lessor retains ownership of the asset, and the lessee typically pays for the use of the asset through regular rental payments. This type of lease is typically used for assets that are expected to have a short useful life or for assets that are likely to become technologically obsolete in a relatively short period of time. Capital leases involve transferring the ownership of the asset to the lessee, while preferred or purchased leases are not common lease types.

A Lease Where the Plan Is Temporary Use of an Asset