Asked by
Nikka Malabanan
on Nov 07, 2024
Verified
A characteristic of an operating lease is that the payments are enough for the lessor to recover the cost of the equipment.
Operating Lease
A lease agreement allowing the use of an asset without ownership, typically with shorter terms than capital leases.
Lessor
An entity that leases property or equipment to a lessee in exchange for rental payments.
- Differentiate between operating leases and financial/capital leases.
Verified Answer
PS
Learning Objectives
- Differentiate between operating leases and financial/capital leases.
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