From the lessee's point of view, which type of lease means that its debt to equity ratio will not be affected?
A)Operating lease
B)Sales-type lease
C)Leveraged lease
D)Finance lease

Question

Quizplus · Accepted Answer

In an operating lease, the lessee only records the lease payments as expenses in their financial statements and does not consider the leased asset as their own. This means that the lessee does not have to recognize the lease liability as debt and thereby the debt to equity ratio is not affected.

From the Lessee's Point of View, Which Type of Lease