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:

Operating Budget

A detailed projection of all anticipated income and expenses based on forecasted sales revenue during a certain period, usually one fiscal year.

Allocating Equipment

The process of distributing machinery, tools, or devices to areas or individuals where they are needed, based on an assessment of demand and available resources.

Construction Projects

Structured endeavors with a defined beginning and end, undertaken to create unique products, services, or results in the field of construction.

Single-use Plan

A strategy designed to address a specific, one-time issue or problem, not intended for repeated use.