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NEW QUESTION: 1

A. 0
B. 1
C. 2
D. 3
Answer: A

NEW QUESTION: 2

A. Option B
B. Option D
C. Option A
D. Option C
Answer: C

NEW QUESTION: 3
Which of the following leases ordinarily should be classified as a finance lease by the lessee?

A. Lease B only
B. Leases C and D only.
C. Leases A, C and D
D. Lease A only
Answer: C
Explanation:
A lease should be classified as a finance lease by a lessee if it transfers substantially all of the risks and rewards of ownership. A lease is classified at its inception. It normally is classified as a finance lease if, for example,1) the lease provides for the transfer of ownership of the leased asset by the end of the lease term;2) the lease contains a bargain purchase option, i.e., the lessee has the option to purchase at a price expected to be sufficiently below the fair value of the exercise date that, at the lease's inception, exercise is reasonably certain;3) the lease term is for the major part of the economic life of the leased asset;4) the present value of the minimum lease payments is at least substantially all of the fair value of the leased asset at the inception of the lease; or5) the leased asset is such that it can be used only by the lessee without major modification_ Lease A a finance lease because the terms of the lease include a bargain purchase option. Lease C passes the economic life test, and lease D passes the recovery of investment test.

NEW QUESTION: 4

A. Option B
B. Option D
C. Option A
D. Option C
Answer: C
Explanation:

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