GAAP establishes specific criteria for the treatment of leases.If any of the criteria are met,the lessee

A) must treat the lease as an operating lease.
B) must treat the lease as a capital lease.
C) may choose the treatment if two or less criteria are met.
D) may elect to treat the lease as an operating lease if only one criterion is met.

GAAP

A set of widely adhered to accounting norms and standards utilized for financial reporting, known as Generally Accepted Accounting Principles.

Capital Lease

A lease agreement that grants a lessee the rights similar to ownership of the asset, typically for a considerable period of the asset's life.

Operating Lease

A leasing agreement allowing the use of an asset without ownership, typically with shorter terms than a finance lease.