6) The deferred tax expense is the a. increase in balance of deferred tax asset minus the increase in balance of deferred tax liability. b. increase in balance of deferred tax liability minus the increase in balance of deferred tax asset. increase in balance of deferred tax asset plus the increase in balance of deferred tax liability. d. decrease in bal ance of deferred liability. c. tax asset minus the increase in balance of deferred tax A temporary difference arises when a revenue item is reported for tax purposes in a period 7) After it is reported in financial income Yes Yes Before it is reported in financial income Yes No a. b. Yes No C. No d. No 8) A lessee with a finance lease containing a purchase option should amortize the right-of-use asset over the a. asset's remaining economic life. b. term of the lease. c. life of the asset or the term of the lease, whichever is shorter. d. life of the asset or the term of the lease, whichever is longer. In computing the present value of the minimum lease payments, the lessee should use its incremental borrowing rate in all cases. b. use either its incremental borrowing rate or the implicit rate of the lessor, whichever is higher, assuming that the implicit rate is known to the lessee. c. use the implicit rate of the lessor, assuming that the implicit rate is known to the lessee. d. none of these. 9) a. Which of the following is a correct statement of one of the lease classification criteria? 10) a. The lease transfers ownership of the property to the lessor. b. The Asset has some alternative value to the lessor at the end of the lease term.. c. The lease term is equal to or more than 75% of the estimated economic life of the leased property d. The total lease payments equals or exceeds substantially all of the fair value of the leased property. 11). Initial direct costs do not include a. legal fees for executing the lease. b. property taxes C. commissions. d. processing documents fees