A Financial Lease Has the Following as Its Primary Characteristics

question 42

Multiple Choice

A financial lease has the following as its primary characteristics:

• A) is fully amortized, lessee maintains equipment and there is no renewal clause and no cancellation clause.
• B) is not fully amortized, lessor maintains equipment and there is a renewal clause but no cancellation clause.
• C) is fully amortized, lessor maintains equipment and there is a renewal clause and a no cancellation clause.
• D) is not fully amortized, lessor maintains equipment and there is a renewal clause.
• E) is fully amortized, lessee maintains equipment and there is a renewal clause and a no cancellation clausE.

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Definitions:

Bearer Note

Bearer Note is a type of negotiable instrument, the benefits of which are payable to whoever holds the note, making it transferable by mere delivery.

Recourse

refers to the right to demand a legal or financial remedy when a contractual obligation is not honored by the other party.

Forged Instrument

indicates a document that has been illegally altered or created to look genuine for the purpose of deceit or fraud.

Checking Account

A bank account from which funds can be withdrawn using checks, debit cards, or electronic transfers, offering easy access to money for daily transactions.