Question

determine whether the following description is true of a capital lease, an operating lease, neither or both.
\a method of financing an asset like equipment without purchasing it outright with equity\

○ capital lease

○ operating lease

○ neither

○ both

Explanation:

A capital lease is a financing lease where the lessee effectively finances the asset (like equipment) without purchasing it outright with equity, as it's treated as a purchase for accounting. An operating lease also allows using an asset without outright equity purchase, as it's a rental for short - term use. So both capital and operating leases are methods to finance (use) an asset without buying it outright with equity.

Answer:

D. Both