Assets leased under ________ leases generally have a usable life longer than the term of the lease.
A) financial
B) operating
C) capital
D) direct

Question

Quizplus · Accepted Answer

Operating leases are generally shorter-term leases where the lessor retains ownership of the asset and the lessee only uses it for a specific period of time. These types of leases are commonly used for equipment or machinery that has a longer usable life than the lease term, making them ideal for businesses that need to update their equipment regularly. Financial and capital leases, on the other hand, are typically used for assets that have a shorter useful life than the lease term, such as vehicles or computers that will need to be replaced in a few years. Direct leases are a less common type of lease where the lessee contracts directly with the manufacturer or dealer for the financing and lease of an asset.

Assets Leased Under ________ Leases Generally Have a Usable Life