Which of the following statements is false?
A) The Canada Revenue Agency (CRA) had its own classification rules under Interpretation Bulletin IT-233R that effectively ruled on June 14, 2001, that the legal form of the contract would be central to determining if the transaction was a sale or lease.
B) A lease contract would be treated as a lease and a sale contract would be treated as a sale.
C) If the contract were designed strictly to avoid tax, the General Anti-Avoidance Rule (GAAR) could be used to reassess the case.
D) The categories used to report leases in the financial statements affect the values of assets on the balance sheet, but they have no direct effect on the cash flows that result from a leasing transaction.

Question

Quizplus · Accepted Answer

The statement that the categories used to report leases in the financial statements affect the values of assets on the balance sheet, but they have no direct effect on the cash flows that result from a leasing transaction is false. The categories chosen to report leases can affect not only the balance sheet but also the income statement and cash flows.

Which of the Following Statements Is False