An operating lease is accounted for as if the lessee has purchased the asset.

Name: An operating lease is accounted for as if the lessee has purchased the asset.
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An operating lease is not accounted for as if the lessee has purchased the asset. Instead, the asset remains on the lessor's balance sheet and the lessee records lease payments as rental expenses. This is different from a capital lease, where the lessee accounts for the asset as if they own it and records depreciation and interest expense.

An Operating Lease Is Accounted for as If the Lessee