All of the following are attributes of operating leases except
A)lease period normally equals the economic life of the asset
B)lease payments under the initial lease contract are insufficient to recover the full cost of the asset for the lessor
C)cancelable
D)maintenance and insurance normally are responsibility of lessor

Question

Quizplus · Accepted Answer

Operating leases have lease periods that are typically shorter than the economic life of the asset, and lease payments are typically not designed to recover the full cost of the asset for the lessor. Operating leases are also cancelable, and maintenance and insurance are typically the responsibility of the lessor. Therefore, attribute A is incorrect as the lease period is not expected to equal the economic life of the asset in an operating lease.

All of the Following Are Attributes of Operating Leases Except