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WorksheetsOperating Lease - Lessor
Total questions: 10
Worksheet time: 6mins
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)
