Which one of the following characteristics does not distinguish financial leases from operating leases?
A)Financial lease analysis compares leasing to borrowing
B)Financial leases are not cancelable
C)Operating leases involve real physical assets
D)Operating leases do not extend over the economic life of the asset

Question

Quizplus · Accepted Answer

All of the other choices distinguish financial leases from operating leases. Financial lease analysis compares leasing to borrowing, financial leases are not cancelable, and operating leases do not extend over the economic life of the asset (usually only a portion). However, the involvement of real physical assets is a characteristic that is shared by both types of leases.

Which One of the Following Characteristics Does Not Distinguish Financial