From the Lessee's Point of View, a Lease Qualifies as a Finance

question 62

Multiple Choice

From the lessee's point of view, a lease qualifies as a finance lease if it contains which one of the following?

• A)The lease term is for a major part of the asset's economic life.
• B)Title to the lease remains with the lessor
• C)The lease does not contain a bargain purchase option
• D)The present value of the minimum lease payments is at least 60% of the asset's fair market value

---

Definitions:

Debit

A bookkeeping record that leads to an uptick in a firm's assets or a reduction in its liabilities on the balance sheet.

Account Receivable

Money owed to a company by its customers for goods or services delivered but not yet paid for.

Total Assets

The sum of all current and non-current assets owned by a business, representing its value and operational capacity.

Increase

Increase signifies a rise in value or quantity of a variable or account in the context of finance and accounting.