1)For companies that prepare their financial statements in accordance with IFRS, a lessee will reassess variable lease payments that depend on an index or a rate

a)only when the terms of the lease are modifies by the lessee and lessor.

b)only when the lessee remeasures the right-of-use asset and lease liability for other reasons.

c)using the discount rate in effect at the commencement of the lease.

d)not just when the lessee remeasures the right-of-use asset and lease liability for other reasons, but also whenever there is a change in the cash flows resulting from a change in the reference index or rate.

2)For a salestype lease, the gross investment of the lessor is equal to the

a)Difference between the fair value of the leased asset and the unearned interest revenue.

b)Present value of the lease payments minus the unguaranteed residual value accruing to the lessor at the end of the lease term.

c)Lower of 90% of the present value of the lease payments or the fair value of the leased asset.

d)Lease payments plus the unguaranteed residual value accruing to the lessor at the end of the lease term.

3)Blue Company is the lessee in an operating lease. Blue will report straightline lease expense if it uses:

a)Either U.S. GAAP or IFRS.

b)IFRS.

c)Neither U.S. GAAP nor IFRS.

d)U.S. GAAP.

4)At the beginning of a finance lease, the guaranteed residual value should be

a)Included as part of lease payments only to the extent that guaranteed residual value is expected to exceed estimated residual value.

b)Included as part of lease payments at future value.

c)Included as part of lease payments at present value.

d)Excluded from lease payments.