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.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter20: Accounting For Leases

Section: Chapter Questions

Problem 13GI: What is the basic difference between the accounting procedures used by a lessor for a sales-type...

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Which of the following is not correct statement for accounting by the lessee? The lessee records depreciation expense on the right-of-use asset. O b. The lessee recognizes interest expense on the lease liability over the lease term O c. The lease liability is computed as the present value of the lease payments. O d. The operating lease method is used to account for the lease.
(4) In a lease that is appropriately recorded as a direct-financing lease by the lessor, unearned income A. should be amortized over the period of the lease using the effective interest method. B. should be amortized over the period of the lease using the straight-line method. C. does not arise. D. should be recognized at the lease's expiration. E. None of these answer choices are correct.
1. In a lease that is recorded as a manufacturer's lease or dealer's lease by the lessor, interest revenue a. should be recognized in full as revenue at the lease's inception. b. should be recognized over the period of the lease using the straight-line method. c. should be recognized over the period of the lease using the interest method. d. does not arise.
Which of the following statements is characteristic of leases? a.If a lease is classified as an operating lease, the lessee records an asset on its statement of financial position. b.Lease agreements are not a popular form of financing the purchase of assets because leases require a large initial outlay of cash. c.If a lessor classifies a lease as a finance lease, the lessor records a lease liability on its statement of earnings. d.Accounting recognizes two types of leases—operating and finance.
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. thanks for help
The methods of accounting for a lease by the lessor are: a. operating and finance lease method. b. operating and sales-type method. c. operating and leveraged lease method. d. None of the above.
A lessee records a lease obligation with a credit to the obligation in the amount of a. the total amount of the rental payments and other payments that are probable to occur b. the present value of the rental payments only c. the total amount of the rental payments only d. the present value of the rental payments and other payments that are probable to occur
Which of the following accounts would not appear on the income statement of a lessee in connection with a finance lease? 0 A. Amortization expense B. Interest expense OC. Services expense for a nonlease component D. Rental expense
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
Initially, a lease liability is measured a. by the lessee at the present value of the lease payments that are not paid at the commencement date of the lease. b. by the lessor at the present value of the total lease payments payable at the commencement date of the lease. c. by the lessor at the total cost of the right-of-use asset. d. by the lessee at the total cost of the right-of-use asset.
Which of the following is a required financial statement presentation by a lessee for both capital leases and operating lease? A. Amortization Expense and Interest Expense B. Lease Expense C. Right-of-Use Asset and Lease Liability D. The reduction of the Lease Liability as a financing activity
Payments on an operating lease will appear: A. In the profit and loss account as an expense B. In the balance sheet as a fixed asset. C. In the balance sheet as along as a long term creditor. D. In the profit and account as a non-trading revenue.