What is the effect of classifying a lease as an operating lease, as opposed to as a finance lease, on the debt to equity ratio and times-interest-earned ratio? $\begin{array}{lll}
& \text { Debt to equity ratio}& \text {Times-interest-earned ratio }\\hline
\text { a. } & \text { Overstated } & \text {Overstated } \
\text { b. } & \text { Overstated } & \text { Understated } \
\text { c. } & \text { Understated } & \text { Overstated } \
\text { d. } & \text { Understated } & \text { Understated }
\end{array}$

Question

What is the effect of classifying a lease as an operating lease, as opposed to as a finance lease, on the debt to equity ratio and times-interest-earned ratio? $\begin{array}{lll}
& \text {  Debt to equity ratio}& \text {Times-interest-earned ratio  }\\hline
\text { a. } & \text { Overstated } & \text {Overstated } \
\text { b. } & \text { Overstated } & \text { Understated } \
\text { c. } & \text { Understated } & \text { Overstated } \
\text { d. } & \text { Understated } & \text { Understated }
\end{array}$

Quizplus · Accepted Answer

The Answer of What is the effect of classifying a lease as an operating lease, as opposed to as a finance lease, on the debt to equity ratio and times-interest-earned ratio? $\begin{array}{lll}
& \text {  Debt to equity ratio}& \text {Times-interest-earned ratio  }\\hline
\text { a. } & \text { Overstated } & \text {Overstated } \
\text { b. } & \text { Overstated } & \text { Understated } \
\text { c. } & \text { Understated } & \text { Overstated } \
\text { d. } & \text { Understated } & \text { Understated }
\end{array}$

What Is the Effect of Classifying a Lease as an Operating