Which factor determines bargain purchase option classification in equipment lease? Financial Accounting MCQ: Which factorbargain purchasedeterminesclassification in equipment leases?a) Lessor's cost of equipmentb) Fair value at end of leasec) Present value of lease paymentsoptiond) Exercise price relative to expected value

Explanation of Bargain Purchase Option:A bargain purchase option refers to a provision in a lease…

Answered: Financial Accounting MCQ: Which factor…

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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Question related to Financial Accounting: How do executory costs affect capital lease classification tests? A. Include in minimum lease payments B. Add to lease liability only C. Capitalize as separate asset D. Exclude from payment calculations
Financial Accounting MCQ
Which of the following cash flows is classified as an investing cash flow? A. interest portion of payment received under a direct financing lease B. reduction of a direct financing lease receivable C. purchase of an asset leased under a sales-type lease D. payment received under an operating lease
Initial direct costs incurred by the lessor under a sales-type lease should be a. Deferred and allocated over the economic life of the leased property. b. Expensed in the period incurred. c. Deferred and allocated over the term of the lease in proportion to the recognition of rental income. d. Added to the gross investment in the lease and amortized over the term of the lease as a yield adjustment.
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The appropriate valuation of an operating lease in the balance sheet of the lessee is? right of use asset present value of lease payments nil gross amount of lease payments
Which of the following is most likely a lessee’s disclosure about operating leases?A . Lease liabilities.B . Future obligations by maturity.C . Net carrying amounts of leased assets.
A(n) is a contract for the use of an asset for a period of time without having to buy the asset. Oa. indenture Ob. revenue option Oc. lease Od. depreciation hedge
1. In a sale and leaseback transaction, what is used by the buyer-lessor to depreciate the cost of the leased asset? A. Lease term B. Total Useful life C. Excess of useful life over the lease term D. Remaining useful life 2. Which of the following scenarios regarding a sale and leaseback transaction would result to a loss to the seller-lessee? A. Fair Value < Carrying Amount B. Sale Price < Fair Value C.Sale Price > Fair Value D.Fair Value > Carrying Amount 3. When does a buyer-lessor recognize a financial asset from a sale and leaseback transaction? A. Sale Price > Fair Value B. Fair Value < Carrying Amount C. Sale Price < Fair Value D. Fair Value > Carrying Amount
Question A capital lease is treated as a) Operating expense b) Short-term liability c) Purchase of an asset d) Revenue
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Financial Accounting MCQ: Which factor bargain purchase determines classification in equipment leases? a) Lessor's cost of equipment b) Fair value at end of lease c) Present value of lease payments option d) Exercise price relative to expected value