1. Indicate the account(s) closed at the end of an accounting period

Select one:

a. Billings, but not Construction in Process

b. Construction in Process, but not Billings

c. Both Billings and Construction in Process

d. Neither Billings nor Construction in Process

2. A 12-year capital lease specifies equal minimum annual lease payments. Part of this payment represents interest and part represents a reduction in the net lease liability. The portion of the minimum lease payment in year 10 applicable to lease liability should be:

Select one:

a. Less than in year 8

b. The same as in year 8

c. Less than in year 12

d. More than in year 12

3. Assume a capital lease. The lessee's interest rate is 6%, the lessor's interest rate is 5%. Neither lessee nor lessor is aware of the other's rate. Indicate the rate to be used by the lessee and lessor, respectively.

Select one:

a. 5%, 5%

b. 6%, 5%

c. 5%, 6%

d. 6%, 6%