11. How will you distinguish direct financing lease to a sales type lease?

a. Direct financing lease recognizes only interest income while sales type lease recognizes both interest income and gross profit on sale.

b. Direct financing lease recognizes both interest income and gross profit on sale while sales type lease recognizes only interest income.

c. Direct financing lease and sales type lease are the same because they recognize both the interest income and gross profit on sale.

d. none of the above.

12. Recognized as unearned rent income to be amortized over the lease term.

a. Lease incentive

b. Lease bonus

c. Initial direct cost

d. Security deposit