There are no real differences between true leases and purchase arrangements.

Question

Quizplus · Accepted Answer

There are significant differences between true leases and purchase arrangements. A true lease allows a lessee to use an asset for a limited period of time without transferring ownership, while a purchase arrangement results in the transfer of ownership from the seller to the buyer. The lessee in a true lease does not make any payments that are attributed to ownership equity, while in a purchase arrangement, payments are made towards the cost of the asset. Additionally, at the end of a true lease, the lessee has the option to return the asset or purchase it at its residual value, while in a purchase arrangement, the buyer fully owns the asset and has no obligation to return it or make any additional payments.

There Are No Real Differences Between True Leases and Purchase