Under USGAAP,which of the Following Items Would Require a Lessee to to Classify

question 22

Multiple Choice

Under U.S.GAAP,which of the following items would require a lessee to classify a lease of equipment as a capital lease?

• A) There is no transfer of ownership to the lessee at the end of the lease term.
• B) The lease does not contain a bargain purchase option.
• C) The lease term is 90% of the estimated economic life of the lease property.
• D) The present value of the contractual minimum lease payments is 75% of the fair value of the leased property.

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Definitions:

Commercial Banks

Financial institutions that offer a wide range of banking services to individuals and businesses, including deposit accounts, loans, and other services.

Efficient Market

A market in which asset prices fully reflect all available information, making it impossible to consistently achieve higher returns.

Investment Strategy

A plan for allocating assets among various investment types to achieve specific financial goals, taking into account the investor's risk tolerance and time horizon.

Liabilities

Financial obligations or debts that a company or individual owes.