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1.Which is not an advantage of a lease? a. The financing is at a fixed rate. b. There is protection against obsolescence. c. It offers
1.Which is not an advantage of a lease? a. The financing is at a fixed rate. b. There is protection against obsolescence. c. It offers off-balance sheet financing. d. They are all advantages. 2.Which is not a criteria of a financing lease? a. There is a transfer of ownership. b. The lease term is greater than 75% of its economic life. c. The present value of the payments is less than 90% of its fair value. d. There is a bargain purchase option. 3.Minimum lease payments may include a a. Penalty for failure to renew b. Bargain purchase option c. Guaranteed residual value d. Any of these. 4.Which of the following best describes current practice in accounting for leases? a. Leases are not capitalized b. Leases similar to installment purchases are capitalized c. All long-term leases are capitalized d. All leases are capitalized. 5.A part of the Recovery of Investment test (90% Test), includes minimum lease payments. Which of the following is not included in the minimum lease payments test: a.Bargain purchase option. b.No penalty for failure to renew or extend the lease. c.Guaranteed residual value d.Minimum rental payments
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