💰 CPA Exam Prep

Under ASC 842 (new lease standard), operating leases are:

A Off-balance sheet
B Recognized on the balance sheet as a right-of-use asset and lease liability
C Ignored
D Treated as purchases

✓ Correct Answer: Option B

ASC 842 requires lessees to recognize virtually all leases on the balance sheet as ROU assets and corresponding lease liabilities.

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