When a Lease Contract Does Not Transfer Title to the Lessee,there

question 3

Multiple Choice

When a lease contract does not transfer title to the lessee,there is no bargain purchase option,and the lease term is not at least 75 percent of the estimated useful life of the leased asset.

• A)The lessee must classify the lease as an operating lease.
• B)The amount of unguaranteed salvage value,if any,determines whether the lease is a capital lease or an operating lease.
• C)The interest rate used to determine the present value of the minimum lease payments also determines whether the lease is a capital lease or an operating lease.
• D)The lessee must use the greater of the lessor's rate of return or the lessee's incremental borrowing rate to determine whether the lease is a capital lease or an operating lease.

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Definitions:

Physiological Needs

Basic requirements vital to human survival, such as air, food, water, and shelter, often represented as the foundation in Maslow's hierarchy of needs.

Safety

The condition of being protected from or unlikely to cause danger, risk, or injury.

Hierarchy of Needs

A theory in psychology proposed by Abraham Maslow positing that people are motivated to achieve certain needs and that some needs take precedence over others, from basic physiological needs to self-actualization.

Abraham Maslow

A psychologist renowned for establishing the hierarchy of needs according to Maslow, a concept of psychological well-being based on satisfying inborn human necessities.