Which of the following statements is true?

Question

Quizplus · Accepted Answer

Under Operating leases, the lessor retains ownership and takes on the risks and rewards associated with ownership. As such, there is no adjustment needed in the income distribution schedule. Similarly, under Direct-Financing leases, the lessor transfers most of the rewards and risks associated with ownership to the lessee, so there is no adjustment needed in the income distribution schedule. However, under Sales-Type leases, the lessor transfers all significant risks and rewards of ownership to the lessee, resulting in an adjustment to the income distribution schedule.

Which of the Following Statements Is True