1. From the lessees point of view, leasing provides a method of making a sale while still maintaining the advantages of ownership, including security in the asset and tax benefits.

a. True b. False

2. Which is an advantage of leasing from a lessee's viewpoint?

a. The asset can be acquired without having to make a substantial down payment.

b. The lease is a way of indirectly making a sale.

c. "Off-balance-sheet financing" may be practiced.

d. Assets and liabilities associated with the lease may not be reported.

3 From the lessee's viewpoint, which of the following is not an advantage of leasing?

a. In many cases, an asset may be leased without requiring the lessee to record the lease asset and lease liability.

b. A lease agreement may reduce the risk of obsolescence for a lessee.

c. In many cases, an asset may be leased without requiring the lessee to make a substantial down payment.

d. The lessee may be able to claim larger tax deductions through leasing the asset than if the asset were purchased

4.Which is not an advantage of leasing from a lessee's viewpoint?

a. The asset can be acquired without having to make a substantial down payment.

b. "Off-balance-sheet financing" may be practiced.

c. A lease may provide 100% financing.

d. The risk of obsolescence may be reduced.

5.The lessor is the party in the lease agreement who acquires the right to use the leased asset in exchange for making future lease payments.

a. True b. False