Question

Which of the following statement is (are) true about leasing?

1) Leasing is a long-term rental agreement for an asset.
2) Leasing allows businesses to use assets without having to purchase them.
3) Leasing provides tax benefits to businesses.
4) Leasing is only available for certain types of assets.

Answer 1

Leasing is a long-term rental agreement for an asset, it allows businesses to use assets without having to purchase them, and provides tax benefits. It is available for various types of assets.

Step-by-step explanation:

The following statements about leasing are true:

1. Leasing is a long-term rental agreement for an asset. This means that instead of purchasing the asset, a business can rent it for a specified period of time.
2. Leasing allows businesses to use assets without having to purchase them. This can be advantageous for businesses that need to use assets temporarily or do not want to tie up their capital in purchasing.
3. Leasing provides tax benefits to businesses. In some cases, lease payments can be tax-deductible expenses, reducing the overall tax liability of the business.

The fourth statement is false: Leasing is available for a wide range of assets, including vehicles, equipment, and even real estate properties.