Which of the Following Correctly States a Lessee Criterion for Classifying

question 90

Multiple Choice

Which of the following correctly states a lessee criterion for classifying a lease as a capital lease?

• A)The lessee guarantees the residual value.
• B)The sum of the lease payments exceeds 90% of the fair value of the asset.
• C)The asset is the property of the lessor at the end of the lease term.
• D)The lease term is equal to 75% or more of the estimated economic life of the leased asset.

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Definitions:

Legal Tender

Coins and paper money officially declared to be acceptable for the settlement of financial debts.

Car Importer

A company or individual that buys foreign cars and brings them into a country to sell.

Drug Trafficking

The illegal trade involving the cultivation, manufacture, distribution, and sale of substances which are subject to drug prohibition laws.

Balance Of Payments

A record of all transactions made between one particular country and all other countries during a specified period, showing the total inflows and outflows of money.