A finance lease is an agreement between an owner of an asset and a user of that asset wherein the:
A) legal title to property is transferred to the lessee when the first lease payment is made;
B) ownership passes to the lessor on inception date of the lease;
C) substantially all of the risks and benefits of ownership remain with the lessor;
D) usual risks and benefits of ownership are transferred to the user.

Question

Quizplus · Accepted Answer

In a finance lease, the lessee (user) assumes substantially all the risks and benefits associated with ownership of the asset, even though legal title may not be transferred until a later time or may never be transferred.

A Finance Lease Is an Agreement Between an Owner of an Asset