Which of the following is not likely to be a reason why a government might obtain an asset through an operating lease? The government
A) Does not have enough cash or credit to purchase the asset.
B) Wishes to avoid the risk of owning an asset that has become obsolete and cannot be sold.
C) Believes the total value of assets reported in the schedule of changes in capital assets is already too high.
D) Needs the asset for only a small part of its useful life.

Question

Quizplus · Accepted Answer

Governments typically engage in operating leases for reasons such as lack of immediate funds (A), avoiding obsolescence risks (B), and needing an asset for a short term (D). The concern about the total value of assets being too high (C) is not a common reason for choosing an operating lease, as the focus is usually on the practical benefits and financial implications of leasing versus buying.

Which of the Following Is Not Likely to Be a Reason