Test Bank Chapter 21 Accounting for Leases.

Document Content and Description Below

Test Bank Chapter 21 Accounting for Leases. CHAPTER 21 ACCOUNTING FOR LEASES IFRS questions are available at the end of this chapter. TRUE-FALSE—Conceptual Description ... T 1. Benefits of leasing. F 2. Accounting for long-term leases. F 3. Classifying lease containing purchase option. T 4. Accounting for executory costs. F 5. Depreciating a capitalized asset. F 6. Lessee recording of interest expense. T 7. Benefit of leasing to lessor. F 8. Distinction between direct-financing and sales-type leases. F 9. Lessors’ classification of leases. T 10. Direct-financing leases. F 11. Accounting for operating lease. F 12. Computing annual lease payments. T 13. Guaranteed residual value definition. F 14. Guaranteed vs. unguaranteed residual value. T 15. Unguaranteed residual value and minimum lease payments. F 16. Net investment and guaranteed/unguaranteed residual value. T 17. Difference between direct-financing and sales-type leases. F 18. Gross profit in sales-type lease. T 19. Review of estimated unguaranteed residual value. T 20. FASB required lease disclosures. MULTIPLE CHOICE—Conceptual Description d 21. Advantages of leasing. d 22. Advantages of leasing. b 23. Basic principle of lease accounting. c 24. Conceptual support for treating all leases as a sale/purchase. a S25. Essential element of a lease. b S26. Bargain purchase option and minimum lease payments. b P27. Cost amount for a capital lease. a 28. Lease accounting by lessee. c 29. Knowledge of the capitalization criteria. d 30. Components of minimum lease payments. d 31. Identification of executory costs. c 32. Discount rate used by lessee. a 33. Depreciation of a leased asset by lessee. b 34. Effect of a capital lease on lessee's debt. a P35. Depreciation of a capital lease. a 36. Identification of lease type for lessor. d 37. Elements of lease receivable by lessor. a 38. Recognition of unearned lease income. c S39. Direct-financing lease receivable. MULTIPLE CHOICE—Conceptual (cont.) Description d S40. Third party guarantee of residual value. a 41. Lessor’s accounting for residual value. c 42. Accounting for initial direct costs. c S43. Difference between direct financing and sales-type lease. b P44. Amount of revenue in sales-type lease. c 45. Accounting for a sales-type lease. d 46. Accounting for initial direct costs. c 47. Disclosing obligations under capital leases. c 48. Leasing criteria to avoid asset capitalization. d *49. Recording asset and interest expense in sale-leaseback lease. b *50. Accounting for sale-leaseback lease. d *51. Gain/loss recognition in a sale-leaseback. P These questions also appear in the Problem-Solving Survival Guide. S These questions also appear in the Study Guide. *This topic is dealt with in an Appendix to the chapter. MULTIPLE CHOICE—Computational Description b 52. Operating lease expense for year. c 53. Calculate interest expense and depreciation expense for lessee. c 54. Calculate minimum annual lease payment. d 55. Calculate total annual lease payment. a 56. Identification of lease type for lessor. c 57. Identification of lease type for lessee. c 58. Calculate depreciation expense for lessee. d 59. Identification of lease type for lessee. c 60. Calculate leased asset amount. c 61. Calculate total lease obligation. a 62. Compute interest expense for year. b 63. Compute interest expense for year. d 64. Calculate lease liability amount. c 65. Compute interest expense and depreciation expense for year. c 66. Compute interest expense and depreciation expense for year. d 67. Compute depreciation expense for lease with transfer of title. a 68. Calculate leased asset amount. c 69. Compute interest expense for first year. d 70. Compute principal reduction for second year. c 71. Calculate depreciation expense for lessee. b 72. Compute interest expense for first year. c 73. Calculate leased asset and lease liability amounts. a 74. Calculate annual lease payments. b 75. Identification of lease type for lessee. b 76. Expense recorded by lessee/operating lease. c 77. Calculate reduction of lease obligation for lessee. a 78. Identification of lease type for lessor. c 79. Calculate lease receivable. MULTIPLE CHOICE—Computational (cont.) Description d 80. Revenues and expenses recorded by lessor/operating lease. a 81. Operating lease expense for year. d 82. Calculate expense of an operating lease. a 83. Calculate income from operating lease. d 84 Journal entry in direct-financing lease. b 85. Calculate lease payments. b 86. Journal entry for lessee. c 87. Journal entry for lessee. c 88. Calculate loss on guaranteed residual value lease. c 89. Calculate interest revenue in sales-type lease. c 90. Determine gross profit and interest revenue. a 91. Calculate interest expense and depreciation expense for lessee. b 92. Calculate profit and interest income for lessor/sales-type lease. c 93. Calculate profit on sales-type lease and interest income. c 94. Identification of lease type for lessor. b 95. Determine discount rate implicit in lease payments. d 96. Lease-related expenses recognized by lessee. d 97. Determine long-term lease obligation for lessee. b *98. Gain recognized by lessee in a sale-leaseback. b *99. Sale-leaseback/operating lease. MULTIPLE CHOICE—CPA Adapted Description c 100. Identification of lease type for lessee. a 101. Calculate the lease liability of a lessee. d 102. Calculate the lease liability of a lessee. a 103. Determine reduction of lease obligation for lessee. d 104. Calculate interest expense for lessee. d 105. Calculate depreciation expense for lessee. c 106. Recognition of interest revenue in a sales-type lease. a 107. Calculate income realized by lessor/sales-type lease. d *108. Reporting gain on a sale-leaseback. d *109. Accounting for the gain on a sale-leaseback. EXERCISES Item Description E21-110 Capital lease (essay). E21-111 Capital lease amortization and journal entries. E21-112 Operating lease. E21-113 Lease criteria for classification by lessor. E21-114 Direct-financing lease (essay). E21-115 Lessor accounting—sales-type lease. *E21-116 Lessee and lessor accounting (sale-leaseback). *E21-117 Sale-leaseback. PROBLEMS Item Description P21-118 Lessee accounting—capital lease. P21-119 Lessee accounting—capital lease. P21-120 Lessor accounting—direct-financing lease. CHAPTER LEARNING OBJECTIVES 1. Explain the nature, economic substance, and advantages of lease transactions. 2. Describe the accounting criteria and procedures for capitalizing leases by the lessee. 3. Contrast the operating and capitalization methods of recording leases. 4. Identify the classifications of leases for the lessor. 5. Describe the lessor's accounting for direct-financing leases. 6. Identify special features of lease arrangements that cause unique accounting problems. 7. Describe the effect of residual values, guaranteed and unguaranteed, on lease accounting. 8. Describe the lessor's accounting for sales-type leases. 9. List the disclosure requirements for leases. *10 . Understand and apply lease-accounting concepts to various lease arrangements. *11. Describe the lessee's accounting for sale-leaseback transactions. SUMMARY OF LEARNING OBJECTIVES BY QUESTIONS Item Type Item Type Item Type Item Type Item Type Item Type Item Type Learning Objective 1 1. TF 2. TF 21. MC 22. MC 23. MC 24. MC S25. MC Learning Objective 2 3. TF 30. MC 55. MC 63. MC 70. MC 77. MC 103. MC 4. TF 31. MC 56. MC 64. MC 71. MC 91. MC 104. MC 5. TF 32. MC 58. MC 65. MC 72. MC 96. MC 105. MC S26. MC 33. MC 59. MC 66. MC 73. MC 97. MC 110. E P27. MC 52. MC 60. MC 67. MC 74. MC 100. MC 111. E 28. MC 53. MC 61. MC 68. MC 75. MC 101. MC 118. P 29. MC 54. MC 62. MC 69. MC 76. MC 102. MC 119. P Learning Objective 3 6. TF 7. TF 34. MC P35. MC 81. MC 82. MC 112. E Learning Objective 4 8. TF 36. MC 57. MC 83. MC 116. E 9. TF 37. MC 78. MC 94. MC Learning Objective 5 10. TF 38. MC 79. MC 84. MC 113. E 120. P 11. TF S39. MC 80. MC 95. MC 114. E Learning Objective 6 12. TF 13. TF 85. MC 119. P Learning Objective 7 14. TF 16. TF 41. MC 87. MC 120. P 15. [Show More]

Last updated: 2 years ago

Preview 1 out of 26 pages