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Unformatted text preview: Intermediate Accounting 12th Edition (by D. E. Kieso, J. J. Weygandt, T. D. Warfield 2007 CHAPTER 21 ACCOUNTING FOR LEASES TRUE-FALSE Conceptual Answer No. 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 Answer No. 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 S 25. Essential element of a lease. b S 26. Bargain purchase option and minimum lease payments. b P 27. 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 P 35. 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 S 39. Direct-financing lease receivable. MULTIPLE CHOICE Conceptual (cont.) Test Bank for Intermediate Accounting, Twelfth Edition Answer No. Description d S 40. Third party guarantee of residual value. c S 41. Difference between direct financing and sales-type lease. b P 42. Amount of revenue in sales-type lease. c 43. Accounting for a sales-type lease. d 44. Accounting for initial direct costs. c 45. Disclosing obligations under capital leases. d *46. 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 Answer No. Description b 47. Operating lease expense for year. c 48. Calculate interest expense and depreciation expense for lessee....
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- Spring '09