An operating lease is usually short-term and can often be terminated by the lessee. It does not necessarily have a lease term equal to 75% or more of the estimated property, and it is not required to be recorded on the balance sheet under current accounting standards.

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An Operating Lease

Question 136

Multiple Choice

An operating lease

A) has a lease term equal to 75% or more of the estimated property.
B) is usually short-term and is often cancelable at the option of the lessee.
C) must appear on the balance sheet.
D) none of these options are correct.

Correct Answer: