13. Companies in Japan and Brazil account for all leases as operating leases, whereas companies in the U.S. and Canada capitalize some leases. What is the difference in these methods?

    1. A) The costs of operating leases are recognized as expenses whereas capital leases are

       recognized as assets.

    2. B) Operating leases are liabilities on the balance sheet and capital leases appear as

       assets.

    3. C) Capital leases are considered assets on the balance sheet and operating leases appear

       only in the footnotes to the financial statements.

    4. D) Capital leases represent large monetary amounts and operating leases are relatively

       small.