Which of the following is an example of off-balance sheet financing?
A)Operating leases
B)Capital leases
C)Issuance of convertible bonds
D)Issuance of common stock

Question

Quizplus · Accepted Answer

Operating leases are an example of off-balance sheet financing because they do not show up as a liability on the company's balance sheet. Instead, the lease payments are recorded as expenses on the income statement. Capital leases, on the other hand, are recorded as an asset and a liability on the balance sheet. The issuance of convertible bonds and common stock are not examples of off-balance sheet financing.

Which of the Following Is an Example of Off-Balance Sheet