9. Which of the following statements is not true. (A) Capitalized leases should be reported on the statement of financial position. (B) All leases must be capitalized. (C) The lessor is the owner of the property in a lease arrangement. (D) The lease liability is determined by computing the present value of the lease payments.

9. Which of the following statements is not true. (A) Capitalized leases should be reported on the statement of financial position. (B) All leases must be capitalized. (C) The lessor is the owner of the property in a lease arrangement. (D) The lease liability is determined by computing the present value of the lease payments.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Which of the following is /are usually correct regarding operating leases? I. The lessor will recoup the entire cost of the leased asset during the term of the original lease. II. The leases are fully amortized. III. The lessee has an obligation under the cancellation option to cancel the lease contract prior to the expiration date. IV. The lessor is responsible for insuring the leased asset. Select one: a. I and III only b. II, III, and IV only c. III and IV only d. IV only
Regarding a basic capital (finance) lease for a lessee, which of the following statements is INCORRECT? The lessee uses the lease as a source of funding. The lessee accounts for the lease as if an asset is purchased and a long-term obligation is entered into. The lessor uses the lease as a source of funding. The lessee records the leased asset at the lower of the minimum lease payments and the fair value of the asset at the lease's inception.
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38. In an operating lease, the lessee records interest expense. lease expense. amortization expense and lease expense. amortization expense.
Under IFRS 16, lessors are required to account for lease receipts from operation leases as a. Income, on a straight-line basis over the lease term b. Revenue, on a reducing balance basis over the lease term c. Revenue, at the end of lease term d. Income, on inception date of the lease
The methods of accounting for a lease by the lessor are Select one: a. operating and finance lease methods. b. none of these. c. operating and leveraged lease methods. d. operating, sales, and finance lease methods. Clear my choice
(48) If, as part of the accounting for a lease, the lessee debits an asset and credits a liability, then the lease must be a(n): A. Finance Lease B. Operating Lease C. Operating lease or finance lease D. none of the above
Leasing is often referred to as off-balance-sheet financing because of the way that the transaction is treated and reported in financial statements. According to the FASB-issued Statement 13, which of the following statements is true? The present value of all future lease payments should be reported as assets on the balance sheet. Leased assets should be reported as current assets on the balance sheet. The present value of all past lease payments should be reported as a liability on the balance sheet. Assets leased under financial or capital leases should be reported as fixed assets on the balance sheet. Consider the following statement on capital leases: According to Statement 13, the payments on a financial lease should be treated as an operating expense and should not in any case. affect a firm's true debt ratio. Is the preceding statement is true or false. True False