When a Lease Contract Does Not Transfer Title to the Lessee

question 23

Multiple Choice

When a lease contract does not transfer title to the lessee, there is no purchase option reasonably certain to be exercised, and the lease term is not the major part of the asset's remaining economic life

• A) The lessee must classify the lease as an operating lease.
• B) The amount of unguaranteed salvage value, if any, determines whether the lease is a finance lease or an operating lease.
• C) The interest rate used to determine the present value of the minimum lease payments also determines whether the lease is a finance lease or an operating lease.
• D) The lessee must use the greater of the lessor's rate of return or the lessee's incremental borrowing rate to determine whether the lease is a finance lease or an operating lease.

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Definitions:

Eligibility Decisions

The process of determining whether an individual meets the specific criteria or standards required for a service, program, or activity.

Learning Disabilities

Neurologically based processing problems that can interfere with learning basic skills such as reading, writing, or math, and can also affect higher-level skills such as organization, time planning, and abstract reasoning.

Antecedents

The circumstances that exist in the environment before a behavior is exhibited. Antecedents may or may not serve as cues to elicit behavior.

Biological Predisposition

An inherent inclination or tendency due to genetic or hereditary factors.