A Lease Where Ownership of the Asset Transfers to the Lessee

question 87

Multiple Choice

A lease where ownership of the asset transfers to the lessee at the end of the lease for a nominal cost is called a:

• A)fair market value cap lease.
• B)fixed price lease.
• C)$1.00 out lease.
• D)fair market value lease.
• E)synthetic lease.

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Definitions:

Merchandise

Goods or products that are bought and sold by businesses in the course of their trade or business operations.

Sales Returns and Allowances

Transactions in which customers return damaged or unsatisfactory products for refunds or credit, and adjustments made to sales revenue for these returns or granted concessions.

Accounts Receivable

Outstanding payments from customers to a firm for delivered or utilized goods or services awaiting settlement.

Merchandise Return

The process whereby customers return previously purchased merchandise to the seller for a refund, store credit, or exchange.