When the total expenses over the life of an operating lease are compared to the total expenses over the life of a capital lease,one will find that:
A)The expenses of a capital lease are greater than the expenses of the operating lease.
B)The expenses of the capital lease and operating lease are equal.
C)The expenses of an operating lease are greater than the expenses of a capital lease.
D)No meaningful comparison can be made.

Question

Quizplus · Accepted Answer

Over the life of the lease, the total expenses for both operating and capital leases are equal, as both reflect the cost of using the asset. However, the timing and recognition of these expenses differ in financial statements.

When the Total Expenses Over the Life of an Operating