Which of the Following Are Specific Tests That the Canada

question 4

Multiple Choice

Which of the following are specific tests that the Canada Revenue Agency will apply to determine if a particular lease meets the definition of a capital lease? The lease term is equal to 75% or more of the economic life of the leased property.
The present value of the minimum lease payments is equal to 70% or more of the fair value of the leased property at the inception of the lease.
Provisions are made such that ownership of the leased property is transferred to the lessee at the end of the lease term.

• A)1 only
• B)1 and 2
• C)1 and 3
• D)2 and 3

---

Definitions:

Total Cost

The complete sum of all costs associated with the production or provision of goods or services, including fixed and variable costs.

Integer-Multiple

A value that is a whole number multiple of another, often used in contexts like inventory stocking or lot sizing.

Sheets

Pages or layers of material, often referring to paper or spreadsheets used for recording data.

Drywall

A construction material composed of gypsum plaster pressed between two thick sheets of paper, used to create interior walls and ceilings.