An operating lease is usually short-term and can be cancelled by the lessee. Option A is referring to a finance lease, not an operating lease. Option C is not true as an operating lease is not required to show up on the balance sheet. Option D is incorrect as option B is correct.

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An Operating Lease

Question 118

Multiple Choice

An operating lease

A) has a lease term equal to 75% or more of the estimated property.
B) is usually short-term and is often cancellable at the option of the lessee.
C) must show up on the balance sheet.
D) none of the other answers are correct.

Correct Answer: