For which of the assets listed below would an operating lease typically be used?
A) A large and expensive piece of machinery
B) A building
C) A $20 000 computer system
D) Land

Question

Quizplus · Accepted Answer

An operating lease would typically be used for assets that are expected to become technologically obsolete or are only needed for a limited period of time. In this case, a $20,000 computer system would be a good candidate for an operating lease, as it is likely to become outdated within a few years and would not be a long-term asset for the company. The other options, such as large machinery, a building, or land, would generally be better suited for a capital lease or purchase.

For Which of the Assets Listed Below Would an Operating