Multiple Choice
Which of these is correct concerning the difference between an operating and a finance lease?
A) Under a finance lease, the customer takes immediate possession of the asset, while under an operating lease, the customer must wait for possession until the full cost is paid.
B) Under an operating lease, the lessee carries the risks and rewards, whereas with a finance lease, these are transferred to the lessor.
C) A finance lease is a long-term lending arrangement, while an operating lease is a short-term arrangement.
D) The asset will be carried and depreciated on the books of the lessee in an operating lease, and on the books of the lessor in a finance lease.
Correct Answer:
Verified
Correct Answer:
Verified
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