Which of the Following Is Not One of the Conditions

question 63

Multiple Choice

Which of the following is not one of the conditions for a capital lease?

• A)The lease term exceeds 90% of the estimated economic life of the property.
• B)The lease term equals or exceeds 75% of the estimated economic life of the property.
• C)Title is transferred to the lessee by the end of the lease.
• D)The present value of the lease payments is at least 90% of the leased asset's fair value at the start of the lease term.
• E)The lease contains a bargain purchase option.

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Definitions:

Illusory Promise

A statement that appears to be a promise but is too vague or lacks commitment to be legally binding and enforceable as a contract.

Promissory Estoppel

A legal principle preventing a party from withdrawing a promise if the other party has reasonably relied on that promise to their detriment.

False Pretenses

The act of knowingly making untrue statements or deceiving others to obtain goods, money, or services unlawfully.

Mutual Exchange

An agreement where two parties exchange goods, services, or other considerations of value, with each party benefiting from the transaction.