Which Type of Lease Will NOT Increase a Company's Assets

question 108

Multiple Choice

Which type of lease will NOT increase a company's assets or long-term liabilities?

• A)A lease in which title is transferred to the lessee at the end of the lease term
• B)The present value of lease payments is 90% or more of the present value of the leased asset
• C)A capital lease
• D)An operating lease

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Definitions:

Market Failure

A situation where the allocation of goods and services by a free market is not efficient, often leading to negative externalities, underproduction, or overproduction.

Wasteful

Referring to the use or allocation of resources in an inefficient manner, leading to unnecessary loss or expenditure.

Interstate Highway

A network of controlled-access highways that form part of the National Highway System in the United States, facilitating interstate and long-distance travel.

Nonexcludability

A characteristic of public goods where it is impossible or highly costly to exclude individuals from consuming the good.