Which of the following statements is correct regarding the classification of leases as either operating leases or financial leases?
A) Total cash flow for the lessee will be higher using an operating lease as opposed to a financial lease.
B) The choice of classification as financial or operating lease has no effect on the financial ratios for the lessee.
C) An operating lease is disclosed in the footnotes to the financial statements for the lessor instead of the balance sheet.
D) The lessee's company will appear larger and have more debt if the lease is classified as a financial lease as opposed to an operating lease.
Correct Answer:
Verified
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