NOTE: the Following Multiple Choice Questions Require Present Value Information

question 49

Multiple Choice

NOTE: The following multiple choice questions require present value information. On January 1, 2006, Price Corporation signed a five-year noncancelable lease for certain machinery. The terms of the lease called for:
Under which of the following conditions does the equipment lease qualify for capital lease accounting?

• A) The lease does not contain a bargain purchase option.
• B) The lease term is equal to or greater than 75% of the asset's economic life.
• C) The lease term is equal to or greater than 90% of the asset's economic life.
• D) The lease does not transfer ownership to the lessee at the end of the lease term.

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Definitions:

Salty Receptors

Taste receptors on the tongue that detect the presence of salt, one of the basic tastes.

Dark Adaptation

The process by which the eyes increase their sensitivity to low levels of light, enabling vision in dim conditions.

Sensory Threshold

The minimum level of intensity at which a stimulus can be detected by the senses.

Rods

Photoreceptor cells in the retina of the eye that are responsible for vision at low light levels.