1. Which of the following factors would NOT result in a lease being classified as a finance lease?

a- Lessee transfers ownership to the lessee by end of the lease term

b - he title of the asset is not transferred to the lessee at end of lease term

c - The lease term is for a major part of the economic life of an asset, even if the title is not transferred.

d - At inception date, the PV of lease payments to be received by Lessor = fair value (FV) of leased asset

2. A contract is, or contains a lease......

a- If the contract does not convey the right to control the use of an identified asset for a period of time in exchange for consideration.

b- If the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

c- If the contract conveys the right to control the use of an identified asset for a period of time in exchange for no consideration.

3. If an entity requires the use of an item of PPE what could it not do?

a- Buy the PPE item with borrowed funds

b- Lease the PPE item from a lessor

c- Buy the PPE item for cash

d- Buy the PPE item for cash

4. True or False? There has been No change in the new accounting standard for Lessees.

a. false

b- true

5. What is not included in lease payments for the lessee?

a) Fixed payments

b) Variable lease payments dependent on an index rate

c) URGV

d) Purchase option if lessee is reasonably certain to exercise

Thank You!