The methods of accounting for a lease by the lessee are

Question

Quizplus · Accepted Answer

The methods of accounting for a lease by the lessee are primarily operating and finance lease methods. The operating lease method is used when the lessee does not transfer substantially all the risks and rewards incidental to ownership of the asset, while the finance lease method is used when the lessee assumes substantially all the risks and rewards incidental to ownership of the asset. The sales and leveraged lease methods are also used for accounting for leases, but to a lesser extent than the operating and finance lease methods. Therefore, option A is the best choice.

The Methods of Accounting for a Lease by the Lessee