Financial leasing is only justified by one of the following arguments.

Question

Quizplus · Accepted Answer

Financial leasing allows the lessor to claim tax breaks, such as capital cost allowance (CCA) tax shields. The lessor can make better use of these tax benefits than a lessee, who may have different tax situations or may not be able to use the benefits as efficiently. This is often the primary justification for financial leasing. B, C, and D are incorrect because hiding capital expenditures, getting access to an asset with no money down, or not appearing on the balance sheet are not necessarily beneficial or justifiable reasons for financial leasing.

Financial Leasing Is Only Justified by One of the Following