Rent received in advance by the lessor in an operating lease should be recognized as revenue

• When received.

• At the lease inception

• At the lease expiration

• In the period specified by the lease

Lease payments under an operating lease shall be recognized as an income by the lessor on

• Straight line basis over the lease term

• Diminishing balance basis

• Sum of units basis

• Cash basis

In an operating lease that is recorded by the lessor, the equal monthly rental payments should be

• Recorded as reduction of depreciation.

• Allocated between reduction in lease receivable and interest expense.

• Recorded as reduction in the lease receivable.

• Recorded as a rental income.

Which statement characterizes an operating lease?

• The lessee records depreciation and interest.

• The lessee records a lease obligation

• The lessor transfers title of the underlying asset to the lessee for the duration of the lease term.

• The lessor records depreciation and lease revenue.

The classification of a lease is normally carried out

• At the end of the lease term

• After a "cooling off period" of one year

• At the inception of the lease

• When the entity deems it to be necessary

The classification of a lease as either operating or finance lease is based on

• The length of the lease.

• The transfer of the risks and rewards of ownership.

• The lease payments being at least 50% of fair value.

• The economic life of the underlying asset.

All of the following situations would prima facie lead to a lease being classified as a finance lease, except

• Transfer of ownership to the lessee.

• Option to purchase at a value below the fair value of the underlying asset.

• The lease term is for a major part of the asset's life.

• The present value of the lease payments is 50% of the fair value of the asset.

In case of lease of land and building, the lease payments should be split

• According to relative fair value of the two elements.

• Based on the useful life of the two elements.

• Using the sum of digits method.

• According to method devised by the entity.

Where there is a lease of land and building and the title to the land is not transferred, generally the lease is treated as if

• The land is finance lease.

• The land is finance and the building is operating.

• The land is operating and the building is finance.

• The land and building are an operating lease.

One of the four determinative criteria for a finance lease specifies that the lease term be equal to or greater than ​ (a)  

• 75 percent of the economic life of the asset.
• The economic life of the underlying asset.
• 90 percent of the economic life of the asset
• 50 percent of the economic life of the asset