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Which of the Following Pairs Is Mismatched

question 50

Multiple Choice

Which of the following pairs is mismatched?


Definitions:

Operating Lease

A lease agreement allowing the lessee to use an asset for a shorter period than the asset's useful life without ownership rights.

Implicit Interest Rate

The interest rate that equates the present value of lease payments to the fair value of the leased asset, often used in lease agreements.

Capital Lease

A lease agreement that is considered a purchase by the lessee because of its terms, such as a bargain purchase option, which allow for the transfer of ownership over the asset's life.

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