Which of the Following Is Not One of the Capitalization

question 23

Multiple Choice

Which of the following is not one of the capitalization tests now applicable to both lessees and lessors?

• A)Title passes to the lessee at the end of the lease term.
• B)The lease contract contains a bargain purchase option.
• C)The lease term is at least 75 percent of estimated useful life.
• D)Lease agreement is non-cancellable for a long term.

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Definitions:

Natural Hedge

A risk management strategy that involves offsetting risk by naturally balancing opposing positions in the business.

Denominated

Term used to specify the currency in which a financial obligation is expressed or a financial asset's value is designated.

Foreign Currency Translation

The process of converting the financial results of a company's foreign operations into the reporting currency of the parent company.