Question 24 3 pts Which of these statements is false (applying US GAAP wherever

Question

Question 24 3 pts Which of these statements is false (applying US GAAP wherever appropriate) about leasing? O The present value of lessee's minimum lease payments should not include any executory costs There is no lease that will allow lessee to have an operating lease and its lessor a capital lease. O If both incremental borrowing rate and implicit lease rate are known to Lessee, the rate that results in the lower present value amount is used to determine whether the 90% criteria is met. O For lessee, capital leases result in higher net income than operating leases in the last lease year O If non-cancellable, and 1 of the 4 Group I criteria is met, Lessee must use capital lease treatment 3 pts Question 25

Explanation / Answer

Option D is correct

Net Income and cash flows in capital leases are lesser in the early years as compared to the operating lease.

Option D states that Net income is higher in capital leases than in operating lease in the last year operations, which is false.

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