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The Inclusion of Leases on the Balance Sheet as an Asset

question 92

True/False

The inclusion of leases on the balance sheet as an asset and liability has lowered firms' debt-to-asset ratios.
Generally, the impact is greater upon the smaller of the numerator or denominator. The numerator is smaller in the debt/asset ratio. By adding the same amount to both the top and bottom of the calculation, the numerator is magnified, leading to a greater number. The ratio increases.

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Definitions:

Consciously False

Refers to a statement or claim made with the knowledge that it is not true.

Legitimate Lawsuit

A legal action based on valid claims and supported by evidence, which is brought forth in good faith.

Duress

A condition where a person performs an act as a result of violence, threat, or other pressure against the person, impacting the validity of consent in a legal contract.

Undue Influence

Unfair manipulation or pressure exerted on a person, overriding their free will or judgment, often in legal or financial contexts.

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