Which of the Following Is Not a Normally Attractive Feature

question 26

Multiple Choice

Which of the following is not a normally attractive feature of an operating lease?

• A)the lessee has the option to cancel.
• B)the lessee only needs the equipment for a short time.
• C)the lessee can't afford to buy the asset.
• D)the lessor offers superior and cheaper maintenance than the lessee can perform.

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Definitions:

Heterogeneous Assets

Assets that are dissimilar in nature and cannot be easily substituted by or compared with each other within a market or industry.

Residual Value

The estimated value of an asset at the end of its useful life, often considered in leasing and depreciation calculations.

IFRS

International Financial Reporting Standards, a set of accounting standards developed by the International Accounting Standards Board (IASB) that guide how particular types of transactions and other events should be reported in financial statements.

GAAP

A standard collection of rules and standards for accounting that are widely used across the United States.