Element should be present to qualify as capital lease

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Reference no: EM132061362

1. In their simplest form, bonds are pure ________.

A. debt

B. equity

C. current assets

D. hybrid security

2. A ________ occurs when the operations of the acquiring and target firms are combined in order to achieve economies and thereby cause the performance of the merged firm to exceed that of the preminus merged firm.

A. strategic merger

B. operating merger

C. financial merger

D. hostile takeover

3. Under FASB Standard No. 13, which of the following element should be present to qualify as a capital lease?

A. At the beginning of the lease, the present value of the lease payment is equal to 50 percent or more of the fair market value of the leased property less any investment tax credit received by the lessor.

B. The lease term is less than 50 percent of the economic life of the property.

C. The lease does not transfer ownership of the property to the lessee by the end of the lease.

D. The lease contains an option to purchase the property at a "bargain" price

Reference no: EM132061362

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