When all the risks and benefits incidental to ownership are substantially transferred to the lessee,the lease is known as a(n):

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A finance lease is a type of lease agreement where the risks and rewards of ownership are almost completely transferred to the lessee. In other words, a finance lease is a long-term rental agreement in which the lessee is responsible for all of the risks and benefits of ownership, including maintenance, insurance, and other expenses associated with the asset. The lessor retains only a limited residual interest in the asset. This type of lease is commonly used for long-term financing of assets such as equipment or vehicles.

When All the Risks and Benefits Incidental to Ownership Are