1. Which of the following are advantages of leasing? A. A lease obligation may be substantially more restrictive than the provisions of a bond indenture. B. There is a down payment like a purchase. C. The negative effects of obsolescence may be reduced. D. The ability to use the leased asset as collateral in a bond.

2. Which one of these conditions must be met for a lease to qualify as a capital lease? A. The lease contains a bargain purchase price at the end of the lease. B. The lease must have a value of at least $10 million. C. The lease must have a life of 10 years. D. The lease is a buyback lease.

3. An operating lease: A. has a lease term equal to 75% or more of the estimated property. B. is usually short-term and is often cancellable at the option of the lessee. C. must show up on the balance sheet. D. must be classified as current assets and flow through operating expenses.

4. Long-term financing leases currently: A. show up on the balance sheet. B. appear in the footnotes to the annual report. C. appear on the company's income statement. D. do not appear on any financial statements.