Which of the following statements regarding operating leases is FALSE?
A) They are also called a finance leases.
B) The lease is viewed as a rental for accounting purposes.
C) The lessee reports the entire lease payment as an operating expense.
D) They are disclosed in the footnotes of the lessee's financial statements.

Question

Quizplus · Accepted Answer

Operating leases and finance leases are two different types of leases, and they are not interchangeable terms. Operating leases are reported as rentals for accounting purposes, and the lessee reports only the lease payments as operating expenses. They are disclosed in the footnotes of the lessee's financial statements.

Which of the Following Statements Regarding Operating Leases Is FALSE