Final answer:
An operating lease is just like a rental because the lessee can use the asset for a specific period of time without assuming ownership or full responsibility. A capital lease, however, involves transferring ownership and responsibility to the lessee.
Step-by-step explanation:
The correct answer is a. An operating lease. An operating lease is just like a rental because it allows the lessee (the person or company renting the asset) to use the asset for a specific period without assuming ownership or full responsibility for the asset. The lessor (the owner of the asset) remains the legal owner and is responsible for maintenance, repairs, and other costs associated with the asset.
An operating lease is commonly used for short-term rentals of assets like equipment, vehicles, or machinery. It is similar to renting a house or apartment, where the tenant pays rent for a specific period but doesn't own the property.
A capital lease, on the other hand, is more like a purchase than a rental. It involves transferring ownership and responsibility to the lessee during the lease term and often includes a provision to buy the asset at the end of the lease period.