Intermediate Accounting II Quiz 4

Intermediate Accounting II Quiz 4 - Intermediate Accounting...

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Intermediate Accounting II Quiz # 4 Date Group Name Generally accepted accounting principles require that certain lease agreements be accounted for as purchases. The theoretical basis for this treatment is that a lease of this type a. effectively conveys all of the benefits and risks incident to the ownership of property. b. is an example of form over substance. c. provides the use of the leased asset to the lessee for a limited period of time. d. must be recorded in accordance with the concept of cause and effect. 2. Which of the following statements characterizes an operating lease? a. The lessee records depreciation and interest. b. The lessee records the lease obligation related to the leased asset. c. The lessor transfers title of the leased property to the lessee for the duration of the lease term. d. The lessor records depreciation and lease revenue. 3. One of the four general criteria for a capital lease is that the present value at the beginning of the lease term of the minimum lease payments equals or exceeds a. the property's fair market value. b. 90 percent of the property's fair market value. c. 75 percent of the property's fair market value. d. 50 percent of the property's fair market value. 4.
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This note was uploaded on 04/03/2011 for the course ACOOUNTING 3 taught by Professor Gvetadze during the Spring '11 term at Georgian.

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Intermediate Accounting II Quiz 4 - Intermediate Accounting...

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