Question : 11.What the primary accounting issue for lessees? a.Recording interest expense the : 1242706

 

11.What is the primary accounting issue for lessees?

a.Recording interest expense on the lease obligation.

b.Determining whether the lease meets the 90% of fair value test.

c.Off-balance sheet financing.

d.The measurement of the leased asset under a capital lease.

12.What is the primary accounting issue for lessors?

a.Off-balance sheet financing.

b.Revenue recognition and expense allocation over the lease term.

c.Treating the lease in the same manner as the lessee does.

d.Determining whether the lease is a sales-type lease or a direct financing lease.

13.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.

14.A net operating loss carryover that occurs in a company’s second year of operations

a.May cause a company to report a tax benefit in the current period income statement.

b.Has no effect on income tax expense of the current period because no taxes are paid.

c.Causes a company to report a deferred income tax liability for taxes that are not paid currently.

d.Results in future taxable amounts.

15.For a sales-type lease, the net investment is equal to

a.The present value of the minimum lease payments plus executor costs.

b.The net investment minus unearned income.

c.Sales minus the gross profit recognized on the sale.

d.The present value of the gross investment.

16.When a lease contract does not transfer title to the lessee, there is no bargain purchase option, and the lease term is not at least 75 percent of the estimated useful life of the leased asset.

a.The lessee must classify the lease as an operating lease.

b.The amount of unguaranteed salvage value, if any, determines whether the lease is a capital lease or an operating lease.

c.The interest rate used to determine the present value of the minimum lease payments also determines whether the lease is a capital lease or an operating lease.

d.The lessee must use the greater of the lessor’s rate of return or the lessee’s incremental borrowing rate to determine whether the lease is a capital lease or an operating lease.

17.When does the lessee report executory costs as an expense?

a.When they are spelled out in the lease agreement.

b.Only when they are incurred by the lessee and the lease is classified as a capital lease.

c.When they are incurred by the lessee.

d.Only when they are incurred by the lessee and the lease is classified as an operating lease.

18.If the lessor incurs initial direct cost to bring about the lease, when are those costs  expensed in total during the first year of the lease term?

a.When the lease is classified as a sales-type lease.

b.When the lease is classified as a direct financing lease.

c.When the lease is classified as an operating lease.

d.Initial direct costs are always expensed during the first year of the lease term.

19.When a sale and leaseback occurs

a.A gain or loss on the sale of the leased asset is deferred and amortized over the lease term .

b.A gain on sale of the leased asset is deferred and amortized over the lease term.

c.Whether a gain or loss on sale of the leased asset is deferred and amortized over the lease term depends on whether the lease is classified as a capital lease or an operating lease.

d.Both gains and losses are recognized in earnings when the asset is sold.

20.Which of the following would indicate that the lessee should not classify a lease as a capital lease?

a.The fair value of the leased asset is $100,000 and the present value of the minimum lease payments is $95,000.

b.The lease provides for no unguaranteed salvage value.

c.The lessee has the option to purchase the leased asset in 4 years for $2 when the asset’s salvage value is expected to be $20,000.

d.The asset’s useful life is 20 years, a 4 year lease occurs when the asset is 26 years old.

 

 

Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more