Under CICA,________ is viewed as an acquisition for accounting purposes.The asset acquired is listed on the lessee's balance sheet,and the lessee incurs depreciation expenses for the asset.

Question

Quizplus · Accepted Answer

Under CICA (Canadian Institute of Chartered Accountants) guidelines, a capital lease is viewed as an acquisition for accounting purposes. The asset acquired under a capital lease is listed on the lessee's balance sheet, and the lessee incurs depreciation expenses for the asset. On the other hand, an operating lease is treated as a rental transaction, where the leased asset is not recognized on the balance sheet of the lessee, and there are no depreciation expenses. Therefore, the best choice in this case is A) a capital lease.

Under CICA,________ Is Viewed as an Acquisition for Accounting Purposes