Which Factor Would Contribute Toward the Lessor Classifying a Lease

question 2

Multiple Choice

Which factor would contribute toward the lessor classifying a lease as a finance lease?

• A)Lessor retains risk of breakage to leased asset.
• B)Lessor has reward of high resale value.
• C)Lessor does not have risk of change in demand for the leased asset.
• D)Lessor does not have guaranteed residual value.

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Definitions:

Creditors

Individuals or institutions that lend money or extend credit, and are thus owed repayment by the borrower or debtor.

Just-In-Time Inventory

An inventory strategy companies employ to increase efficiency and decrease waste by receiving goods only as they are needed in the production process.

Inventory Levels

A measure of the quantity of goods and materials on hand in a business at any given time.

Planning

The process of defining goals, establishing strategies, and outlining tasks and schedules to achieve the goals.