Of the four criteria for a capital lease,which two are not applied if the lease begins during the final quarter of the asset's useful life?
A)The 75% test and the bargain purchase option.
B)The 90% test and the 75% test.
C)The 90% test is the only one to which this applies.
D)The bargain purchase and the passage of title criteria.

Question

Quizplus · Accepted Answer

The 90% test and the 75% test are not applied if the lease begins during the final quarter of the asset's useful life, as these tests relate to the economic life and value of the asset, which are less relevant at the end of its useful life.

Of the Four Criteria for a Capital Lease,which Two Are