e following statements relate to the impact on the financial statements for operating vs. finance leases. Indicate all statements that are correct lect one or more: a. The right of use asset is shown at a higher amount for a finance lease. b. The lease liability is measured as the present value of future cash flows for both operating and finance leases. c. Net Income is higher at first when a lease is classified as a finance lease. 0 d. Operating Income is lower when a lease is classified as an operating lease.

e following statements relate to the impact on the financial statements for operating vs. finance leases. Indicate all statements that are correct lect one or more: a. The right of use asset is shown at a higher amount for a finance lease. b. The lease liability is measured as the present value of future cash flows for both operating and finance leases. c. Net Income is higher at first when a lease is classified as a finance lease. 0 d. Operating Income is lower when a lease is classified as an operating lease.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Under the FASB old lease standard, when management of a company wishes to window-dress, they classify lease as a capital lease rather than operating lease to generally report: 1. Higher cash flow from operations and higher assets. 2. lower cash flow from operations and lower assets. 3. Identical cash flow from operations and the same amount of assets. 4. None of the above.
What should be the discount rate for capitalizing the operating leases?A. If possible, the implied internal rate of return (IRR) that equates the sum of thediscounted capital lease payments with the reported PV of the payments.B. The effective interest rate (EIR) that represents the average interest rate thatthe company pays on its debt.C. The effective tax rate (ETR) that represents the average tax rate that thecompany pays on its earnings.D. None of the above.
Revenue for a direct financing lease is calculated as ________. Group of answer choices None of the above. the higher of (1) the fair value of the leased asset or (2) the sum of the lease receivable and any lease payments paid before the lease commencement date the lower of (1) the fair value of the leased asset or (2) the sum of the lease receivable and any lease payments paid before the lease commencement date the lower of (1) the residual value of the asset or (2) the sum of the lease receivable and any lease payments paid before the lease commencement date
The appropriate asset value reported in the balance sheet by the lessee for an operating lease is: Multiple Choice Sum of the lease payments. The lessor's book value of the asset at the beginning of the lease. Present value of the lease payments. Zero, unless a prepayment or accrual is involved.
Which of the following statements is/are not true? Interest expense on the lease liability will increase the carrying amount of the liability. A lessee shall measure the lease liability at the present value of the lease payments that are not paid at that date, using the lessee's incremental borrowing rate. Right-of-use asset cost will include an estimates cost to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease. Group of answer choices Only statement 2. All statements are true. Only statements 2 and 3. None of the statements are true.
Regarding a basic capital (finance) lease for a lessee, which of the following statements is INCORRECT? The lessee uses the lease as a source of funding. The lessee accounts for the lease as if an asset is purchased and a long-term obligation is entered into. The lessor uses the lease as a source of funding. The lessee records the leased asset at the lower of the minimum lease payments and the fair value of the asset at the lease's inception.
Example 1 and 2 answers please
In a sale-leaseback transaction, the lease liability is equals to: A. PV of lease payments accruing to the lessor B. PV of lease payments accruing to the lessor plus any additional financing C. PV of lease payments accruing to the lessor less any prepayments D. PV of lease payments accruing to the lessee
question 1: There are nine itsms list under "quantitive disclosure" for the lease. Why aren't short-term lease cost and variable lease cost shown? question 2 : What is the amount cintractual obligations and options that the lessee is reasonably certain to excercise for Operating lease? financing lease?
Which of the following statements is correct related to lease? a. The leased asset is depreciated over the asset's useful life or lease term whichever is higher. b. The leased asset is depreciated over the asset's useful life. c. The leased asset is recorded using the higher amount between fair value of the asset and present value of the minimum lease payments. d. Under IFRS 16 a lease is defined as ‘a contract that conveys the right to use an asset for a period of time in exchange for consideration'.
The methods of accounting for a lease by the lessor are Select one: a. operating and finance lease methods. b. none of these. c. operating and leveraged lease methods. d. operating, sales, and finance lease methods. Clear my choice