Which of the Following Conditions Qualifies a Lease as a Finance

question 2

Multiple Choice

Which of the following conditions qualifies a lease as a finance lease?

• A) The leased asset is specific to the needs of the lessee and without significant changes would not be of use to another company.
• B) The present value of the minimum lease payments covers substantially all of the fair value of the property at the inception of the lease.
• C) The lease term covers the majority of the asset's economic life.
• D) The lease transfers the risks and benefits of ownership to the lessee.
• E) All of these answers are correct.