Which one of the following statements about ﬁnancial leases is correct?
A) Financial leases are fully amortized.
B) Financial leases are NOT capitalized.
C) Financial leases are NOT recorded on the balance sheet.
D) Financial leases are generally short-term leases.
E) Financial leases may be cancelable by the lessee on short notice.

Question

Quizplus · Accepted Answer

Financial leases are long-term leases and are fully amortized over the lease term. They are also capitalized and recorded on the balance sheet. Financial leases are not generally cancelable by the lessee on short notice.

Which One of the Following Statements About ﬁNancial Leases Is