For the lessor to recognize a lease as a sales-type lease,the following must occur.
A)At least one of the capital lease criteria is met,at least one of the certainty criteria is met,and there is a manufacturer or dealer's profit.
B)At least one of the capital lease criteria is met,both certainty criteria are met,and there is a manufacturer or dealer's profit.
C)More than one of the capital lease criteria are met,both certainty criteria are met,and there is a manufacturer or dealer's profit.
D)Only one of the capital lease criteria is met,both certainty criteria are met,and there is a manufacturer or dealer's profit.

Question

Quizplus · Accepted Answer

In order for a lease to be recognized as a sales-type lease, at least one of the capital lease criteria must be met and both certainty criteria must be met. Additionally, there must be a manufacturer or dealer's profit. Option B is the correct choice as it fulfills these requirements.

For the Lessor to Recognize a Lease as a Sales-Type