Use the Facts of This Situation to Answer the Related

question 38

Multiple Choice

Use the facts of this situation to answer the related question that follows it. A enters into an agreement with B,an automobile dealer.A does not have the cash to buy the car,so a leasing arrangement is made under which each lease payment is a payment towards the purchase of the car.Ownership of the car remains with B until A makes the last payment,at which time it is transferred to A.
In the fact situation above,the lease is best described as

• A)a hire-purchase agreement.
• B)an operating lease.
• C)a sale and purchase agreement.
• D)a security lease.
• E)none of the above

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Definitions:

Incremental Approach

A decision-making process that focuses on analyzing the financial impact of small or incremental changes in operations or business activities.

Budgeting

The process of creating a plan to spend your money, outlining projected income and expenses.

Self-Imposed Budget

A budget that is created with the input and agreement of lower and middle management employees, improving commitment and enforcement.

Control

The process of monitoring and regulating operations and activities to ensure they meet certain standards or objectives.