Compared with a financial lease,an operating lease will be associated with:
A) higher earnings per share
B) lower earnings per share
C) no difference in earnings per share
D) impact on earnings per share cannot be determined as operating leases are off-balance sheet items

Question

Quizplus · Accepted Answer

Operating leases typically result in higher earnings per share compared to financial leases because they are treated as off-balance sheet items, meaning the lease liability and asset are not recorded on the balance sheet, thus not affecting the company's reported earnings as significantly as financial leases.

Compared with a Financial Lease,an Operating Lease Will Be Associated