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How does a capital lease differ from an operating lease for the purposes of reporting liabilities?...

How does a capital lease differ from an operating lease for the purposes of reporting liabilities? Select one: a. An operating lease must be long-term, but unlike a capital lease, it can be cancelled. b. A capital lease is long-term and non-cancellable; all other leases are operating leases. c. A capital lease typically is used for the purchase of an asset, while the entity cannot acquire assets through an operating lease. d. Assets purchased by a capital lease are shown as leasehold assets on the balance sheet, while operating leases do not show on the balance sheet as assets or as liabilities. e. B, C, and D.

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Answer #1

option "e" is the correct answer

as the definition of the capital lease the lease term exceeds 75% or more this implies it is an long term

capital lease is recognized in the balance sheet

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