1. On January 1, Year One, Company A leases a truck from Ford for its entire life of 5 years, for an annual payment of $20,000 to be paid on December 31 of each year. The first payment was made on December 31, Year One. A reasonable interest rate is determined to be 10 percent per year. Determine the amount of lease liability reported by Company A on its December 31, Year One balance sheet assuming the lease qualifies as a finance lease.

a. $62,700

b. $64,700

c. $63,398

d. $80,000

e. $100,000

2. A deferred income tax liability on a balance sheet indicates:
   1. a company has delayed its current payment of income tax amount to a future date.
   2. a low debt-equity ratio.
   3. a company is highly leveraged.
   4. a company didnt have enough funds to pay its income tax expense in that year.
   5. a companys policy towards debt and tax payment.

3. Which of the following governs income tax accounting in the United States?
   1. U.S. Generally Accepted Accounting Principles (GAAP)
   2. Securities and Exchange Commission (SEC)
   3. International Financial Reporting Standards (IFRS)
   4. Internal Revenue Code (IRC)
   5. Financial Accounting Standards Board (FASB)

4. Kricket Corporation earns revenue of $50,000 in 20X5 and is reported on the 20X5 income statement. The revenue will not be reported on Krickets tax return until 20X7. Krickets tax rate is 30 percent. Kricket will recognize a deferred income tax liability of:
   1. $15,000 in 20X5.
   2. $50,000 in 20X7.
   3. $30,000 in 20X7.
   4. $50,000 in 20X5.
   5. $15,000 in 20X7.

5. Which of the following is a postretirement benefit provided by a company?
   1. Pension
   2. Paid sick leaves
   3. Profit-sharing
   4. Social security
   5. Sabbatical leave

6. An expert who uses mathematics and statistics to estimate the impact of future events, especially those of concern to insurance and pension programs is called a(n):
   1. CPA.
   2. accountant.
   3. actuary.
   4. IRS agent.
   5. bookkeeper.