If the Present Value of Lease Payments Equals or Exceeds

question 79

Multiple Choice

If the present value of lease payments equals or exceeds 90% of the fair market value of the leased property, the

• A) conditions are met for the lease to be considered a capital lease.
• B) lease is uneconomical and should not be entered into.
• C) lease may be classified as an operating lease.
• D) recording of a lease liability is optional-that is, the off-balance sheet approach can be elected.

Understand the relationship between price changes and demand elasticity.

Grasp how production levels correlate with current and desired margins.

Recognize the characteristics of perfectly elastic and inelastic demand curves.

Determine the effects of income changes on the demand for normal and inferior goods.

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Definitions:

Significant Influence

The power to participate in the financial and operating policy decisions of an investee without having control or joint control over those policies.

Presumptive Test

A preliminary test based on presumptions established by criteria or evidence that suggests or implies a certain condition or outcome.

Voting Power

The right of shareholders to vote on corporate matters, usually proportional to the number of shares they hold.

Equity Stakeholding

Ownership interest in a company, usually represented by holding shares of the company's stock.