While only certain leases are currently accounted for as a sale or purchase, there is theoretic justification for considering all leases to be sales or purchases. The principal reason that supports this idea is that
A) all leases are generally for the economic life of the property and the residual value of the property at the end of the lease is minimal.
B) at the end of the lease the property usually can be purchased by the lessee.
C) a lease reflects the purchase or sale of a quantifiable right to the use of property.
D) during the life of the lease the lessee can effectively treat the property as if it were owned.

Question

Quizplus · Accepted Answer

This choice best explains the theoretic justification for considering all leases to be sales or purchases. Leasing a property grants the lessee a quantifiable right to use the property, which is essentially equivalent to the purchase or sale of the property itself. The other choices do not fully explain why all leases should be considered sales or purchases.

While Only Certain Leases Are Currently Accounted for as a Sale