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Which of the following statements is true about lease accounting methods? (check all that apply)

 
 
 
 

Capital leases actually have lower expenses than operating leases in the last year of the contract, but total expenses are the same. Capital leases actually lead to a higher Debt-to-Equity ratio than Operating leases because the Lease Liabilities are on the balance sheet in that case. Capital leases lead to higher Cash from Operations than Operating leases, but have no effect on Cash from Investing Activities.

 

Capital leases actually have lower expenses than operating leases in the last year of the contract, but total expenses are the same. Capital leases actually lead to a higher Debt-to-Equity ratio than Operating leases because the Lease Liabilities are on the balance sheet in that case. Capital leases lead to higher Cash from Operations than Operating leases, but have no effect on Cash from Investing Activities.

 

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