Question

determine whether the following description is true of a capital lease, an operating lease, neither or both.
\a method that a company can use to acquire an asset by paying for the asset upfront and then depreciating it over time\
capital lease
operating lease
neither
both

Explanation:

• Capital Lease: Treated as asset purchase; company records asset, depreciates it, but typically doesn't pay upfront (financed over lease term).
• Operating Lease: Treated as rental; no asset ownership, so no depreciation or upfront asset payment.
• The description mentions “paying for the asset upfront” and “depreciating it,” which does not match capital (financed, not upfront) or operating (no ownership) lease mechanics. Thus, it fits neither.

Answer:

Neither