Accounting Midterm Exam ACG-2011: Question 73

All of the following statements regarding leases are True except:

	Capital leases do not transfer ownership of the asset under the lease, but operating leases often do.
	Capital leases create a long-term liability on the balance sheet, but operating leases do not.
	For a capital lease the lessee depreciates the asset acquired under the lease, but for an operating lease the lessee does not.
	For a capital lease the lessee records the leased item as its own asset.
	For an operating lease the lessee reports the lease payments as rental expense.