A(n) ________ is a cancelable contractual arrangement whereby the lessee agrees to make periodic payments to the lessor, often for 5 or fewer years, to obtain an asset's services.
A) operating lease
B) financial lease
C) capital lease
D) direct lease

Question

Quizplus · Accepted Answer

An operating lease is a cancelable contractual arrangement in which the lessee (the one using the asset) agrees to make periodic payments to the lessor (the owner of the asset) for the right to use the asset's services. This type of lease is typically used for assets that quickly become obsolete, such as technology equipment, and is often for a shorter period of time (5 years or less) than other types of leases. Unlike a capital lease or a financial lease, an operating lease does not transfer ownership of the asset to the lessee, and the lessor is responsible for maintenance and repairs.

A(n) ________ Is a Cancelable Contractual Arrangement Whereby the Lessee