Which of the following statements about a capital lease is false?

A. The lessor capitalizes the net investment in the lease.

B. The lessor records the leased item as an asset.

C. The lessee records depreciation or capital cost allowance on the leased asset.

D. The lease arrangement represents a form of financing.

Question added by Deleted user
Date Posted: 2015/04/10

Upvote (1) Views (1) Followers (4) Answers (2) Report Question

by MOHAMMED KHATER , Financial Accountant , الرياض

B. The lessor records the leased item as an asset.

essor records the leased item

Upvote (1)

by Nadeem Aslam , Senior Accountant , Central Bureau Recruitment Services (Part of OTI Group)

Option C is correct.

Lessor will not record Depreciation or capital cost allowance on leased assets. Lease can do this in case of finance lease.

In relation to operating leases, which of the following statements is not true?
Top Answer: 1. The lessee has not taken on the risks and rewards incidental to ownership</spa ... See More

Answers (5)
12- Which of the following statements is correct? .
Top Answer: C. IAS 20 allows the treatment of GG either by reducing cost of asset or fixed asset at own cost and GG a ... See More

Answers (3)
Which of the following situations would normally lead to a lease being classified as a finance lease?
Top Answer: The lease term is not for the major part of the asset's economic life&l ... See More

Answers (2)
What is Cash Flow Statement Show a Company's Stability?
Top Answer: From cash flow statement one can assess that how company is managing its operations. Where company is inv ... See More

Answers (57)

Do you need help in adding the right keywords to your CV? Let our CV writing experts help you.