The purchase of capital assets should be consistent with the authorization table used by the entity to approve such transactions. However, no such table is normally used for lease transactions.

Question

Quizplus · Accepted Answer

Lease transactions, especially those classified as finance leases, often involve significant long-term commitments and can impact an entity's balance sheet in a manner similar to capital asset purchases. Therefore, they typically require a similar level of authorization and oversight, which may involve an authorization table or similar control mechanism to ensure proper review and approval.

The Purchase of Capital Assets Should Be Consistent with the Authorization