For Accounting Purposes,which of the Following Conditions Would Automatically Cause

question 23

Multiple Choice

For accounting purposes,which of the following conditions would automatically cause a lease to be a capital lease?

• A) The lessee can purchase the asset below fair market value at the end of the lease.
• B) The lease transfers ownership of the asset to the lessee by the end of the lease.
• C) The lease term is more than 75% of the asset's economic life.
• D) The present value of the lease payments is more than 90% of the asset's market value at lease inception.
• E) All of these would lead to the lease being considered a capital leasE.

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Definitions:

Trend Equation

A mathematical formula that fits a line to a set of data points in a way that best expresses the relationship and tendency over time.

Seasonal Indexes

Quantitative measures that adjust for seasonal variations in data, allowing for more accurate comparison across different time periods.

Centered Moving Averages

A type of moving average that smoothes out short-term fluctuations in a time series dataset by averaging a subset of terms at a time, centered around each point in the series.

Quarterly

Pertaining to a period of three months or occurring four times a year.