An operating lease has which of the following characteristics?
I.lessee has responsibility for the maintenance and insurance
II.lease payments cover the full cost of the asset
III.economic life of the asset exceeds the lease term
IV.lessee can cancel the lease prior to the expiration date
A)I and III only
B)II and IV only
C)I and II only
D)III and IV only
E)I, II, and III only

Question

Quizplus · Accepted Answer

An operating lease typically has a lease term that is shorter than the economic life of the asset (III), and the lessee often has the option to cancel the lease before it expires (IV).

An Operating Lease Has Which of the Following Characteristics