Which of the Following Is Not a Criterion of a Capital

question 30

Multiple Choice

Which of the following is not a criterion of a capital lease?

• A) The lease transfers ownership of the property to the lessee by the end of the lease term.
• B) The present value of the minimum lease payments equals or exceeds 90 percent of the fair value of the leased property, net of lessor's investment tax credit.
• C) The lease contains an option to purchase the leased property at a bargain price.
• D) The lease contains an option to renew.
• E) The lease term is equal to or greater than 75 percent of the estimated economic life of the leased property.

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Definitions:

Payee's Signature

The signature of the individual or entity that is entitled to receive payment on a financial instrument, such as a check or promissory note.

Last Endorsee

The final person or entity to whom a negotiable instrument, such as a cheque, has been legally transferred.

Order Paper

Order Paper is a term used primarily in parliamentary contexts, detailing the day's agenda and the order in which business, such as proposed legislation, will be addressed.

Negotiation

The process by which parties come together to try to reach an agreement on a disputed or potentially disputed matter.