Because operating leases require the lessee to make rent payments,a liability is created,and it must appear on the lessee's balance sheet.The lease is longer than one year.

Question

Quizplus · Accepted Answer

This statement is true. Operating leases typically require the lessee to make periodic rent payments, which creates a liability for the lessee. The liability must be recognized on the lessee's balance sheet, and is typically classified as a current liability if the lease term is less than one year or a long-term liability if the lease term is longer than one year.

Because Operating Leases Require the Lessee to Make Rent Payments,a