In Determining If the Risk and Rewards of Ownership Have

question 65

Multiple Choice

In determining if the risk and rewards of ownership have been transferred,AASB 117 states the following would indicate a finance lease is in effect:

• A) Ownership of the assets transfers at the end of the lease term for a variable payment equal to its then fair value.
• B) Contingent rents exist.
• C) The lease is non-cancellable by the lessor.
• D) The lease term is for a major part of the economic life of the asset.
• E) All of the given answers.

---

Definitions:

Capital

Assets used for the production of goods and services, such as machinery, buildings, and equipment.

Bumper Crop

An unusually large harvest of a particular crop, often due to favorable growing conditions, exceeding average yields.

Production Possibility Frontier

A curve depicting the maximum output combinations of two goods or services an economy can achieve when using all resources efficiently.

Economic Problem

The fundamental challenge of having limited resources to meet unlimited wants, necessitating choices and priorities in resource allocation.