Leases that are treated as financed purchases are called:

Question

Quizplus · Accepted Answer

Capital leases are treated as financed purchases because they involve transferring the ownership of the asset to the lessee at the end of the lease term. This type of lease is reflected on the lessee's balance sheet, and the lessee bears the risks and rewards of ownership, such as maintenance and insurance costs. On the other hand, operating leases are treated as operating expenses because they do not transfer ownership, and the lessor retains the risks and rewards of ownership.

Leases That Are Treated as Financed Purchases Are Called