Which statement best defines a lease?

Which statement best defines a lease?

• A. A contract in which use and possession but not title to tangible property is transferred for consideration
• B. A sale of equipment with immediate title transfer
• C. A service contract with no transfer of use rights
• D. A license to use intellectual property

Answer: (A)

A lease is a contract where you obtain the use and possession of tangible property for a period in exchange for payment, while ownership or title stays with the lessor. This definition matches the statement that describes transfer of use and possession but not title for consideration. The other options describe things that aren’t leases: a sale with immediate title transfer is ownership transfer, not a lease; a service contract doesn’t transfer use rights of a property; and a license to use intellectual property involves IP rights rather than the transfer of tangible property and its possession.

A lease is a contract where you obtain the use and possession of tangible property for a period in exchange for payment, while ownership or title stays with the lessor. This definition matches the statement that describes transfer of use and possession but not title for consideration. The other options describe things that aren’t leases: a sale with immediate title transfer is ownership transfer, not a lease; a service contract doesn’t transfer use rights of a property; and a license to use intellectual property involves IP rights rather than the transfer of tangible property and its possession.