Font size
WorksheetsIntermediate Accounting 3 (Leases: Theories)
Total questions: 13
Worksheet time: 5mins
A contract, or part of a contract, that conveys the right to use an asset for a period of time in exchange for consideration, given that the supplier has a substantive right regarding the said asset.
Manufacturer's Lease
Finance Lease
Lease
None of the above
All of the above
Lease term refers to the cancelable period of lease together with:
a. periods covered by an option to renew if the lessee is reasonably certain to exercise that option
b. periods covered by an option to terminate the lease if the lessee is reasonably certain NOT to exercise that option
TRUE
FALSE
Lease term can be measured with the following, EXCEPT:
periods of time
production units
None of the above
All of the above
A right-of-use asset shall initially be recognized at (a)
(note: the number of blanks is irrelevant to the answer)
Which of the following items are included in measuring the right-of-use asset?
(NOTE: You can choose more than one answer)
FV of lease payments paid
Cost of lease payments not yet paid
Initial direct costs incurred by the lessee
Any estimated costs for dismantling and removing the asset
Lease bonus to the lessor
Estimated costs for dismantling and removing refer to decommissioning costs capitalized as part of the cost of an item of PPE, and are recognized as contingent liability if the entity has a constructive or legal obligation for removal of asset or restoration of the site.
TRUE
FALSE
Lease incentives granted by the lessor shall be included in determining the fixed lease payments.
TRUE
FALSE
The existence of a residual value guarantee indicates that the lease does NOT have a bargain purchase option nor a provision for transfer of title.
TRUE
FALSE
If residual value at the end of the lease term is lower than the amount guaranteed by the lessee, it is recognized as loss in the books of the lessor.
TRUE
FALSE
Statement A: The lessee shall recognize a gain or loss relating to partial or full termination of the lease in P/L.
Statement B: A lease modification not accounted for as a separate contract requires a re-measurement of the lease liability using the old implicit rate.
Both statements are true
Both statements are false
Only Statement A is true.
Only Statement B is true.
The lessee shall present the right-of-use asset separately from other assets. However, a right-of-use asset that meets the definition of an investment property need not be presented separately from other assets.
TRUE
FALSE
cash payments for lease liability : financing activity
cash payments for short-term lease : ___________
Operating Activity
Financing Activity
Investing Activity
None of the above
Which of the following is/are indicator/s of a finance lease?
(NOTE: Select all that apply.)
Transfer of ownership of the asset to the lessee by the lessor
The economic term is for the major part of the useful life of the asset even if the title is not transferred
PV of lease payments amounts to substantially all of the FV of leased asset
The underlying asset is common in nature
The lessee has an option to purchase the asset at a price significantly lower than the fair value
