Question
Reporting operating leases as short-term leases results in a number of distortions in the ROE disaggregation analysis. Which of the following is not a distortion?
a. Operating income is lower.
b. Net operating asset turnover is overstated.
c. Financial leverage is understated.
d. All of the above are distortions.
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Operating leases are used for shortterm leasing of assets and are similar to renting as they do not involve any transfer of ownership Periodic lease p...
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Auditing and Assurance Services
Authors: Timothy Louwers, Robert Ramsay, David Sinason, Jerry Straws
6th edition
978-1259197109, 77632281, 77862341, 1259197107, 9780077632281, 978-0077862343
