Question 2 1 Point Considering whether to use historical cost or fair value relates to which of the following components in accounting policy decisions? Definition Measurement Disclosure 0 Recognition Question 3 1 Point An operating lease under the former AASB 117 was one in which: the lessee is required to maintain the leased asset according to an agreed maintenance schedule. B the risks and benefits of ownership reside with the lessor, the lessee agrees to maintain the operating capability of the asset to a level specified by the lessor. the risks and benefits of ownership reside with the lessor and the lessee is required to maintain the leased asset according to an agreed maintenance schedule. Question 4 2 Points Kensington Ltd decides to lease some equipment from Piccadilly Ltd on the following terms: Duration of lease 15 years Life of leased asset 17 years Bargain Purchase Option $5,000 Lease payment $6,000 at least inception Annual lease payments (in arrears) $4,500 per year (15 payments) of the interest rate implicit in the lease is 8%. what is the fair value of the equipment at the inception of the lease (rounded to the nearest dollar)? 544 518 $48 399 $46094 0 $40 094 Question 5 Which of the following transactions/events does not meet the definition of an asset? oral commitment to purchase equipment B deposit for purchase of equipment purchase of equipment on credit, D finance leased equipment Question 6 1 Point James Cook Ltd bought a piece of land 10 years ago and the market value of this property is now worth five times its purchase cost. The accountant suggested that james Cook Ltd should revalue the asset. This notion is consistent with the qualitative characteristic of: A understandability. B timeliness. comparability D relevance. Question 7 1 Pol The central accounting issue associated with leases is: A the treatment of provisions for the repairs and maintenance on leased assets. B the method of recording any commitment to guarantee the value of the asset at the end of the lease term. whether or not the leased assets should be treated as assets of the lessee. the timing of the recognition of the lease payments. Question 8 1 Point that the The Framework's recognition criteria provides that an asset is recognised in the balance sheet when it is future economic benefits will flow to the entity and the asset has a cost or value that can be measured A probable, accurately B Possible; reliably certain accurately O probable; reliably Question 9 4 Points Johnson Ltd enters into a lease agreement with Peterson Ltd in late 2018 under the following conditions: Duration of lease: 10 years Life of leased asset: 12 years Bargain Purchase Option: $8.000 Lease payment: $6,500 at lease inception Annual lease payments (in arrears): $7,000 per year (10 payments) The tease may be cancelled only with the permission of the lessor. If the rate of interest implicit in the lease is 10%, what is the fair value of the asset at the inception of the lease and assuming that the company decides not to early adopt AASB 16 would the lease be a Finance' or 'Operating' lease under the former AASB 117? A 552 596, finance lease $52 596, operating lease $56 745, finance lease 556 745, operating lease Question 10 1 Po The only element in financial statements which has no independent definition under the Conceptual Framework is: A assets. B liabilities. expenses D equity Question 11 1 Point Which of the following is included within the scope of AASB 16? A lease agreements to explore for minerals B lease agreements for buildings and machinery lease agreements for motion picture films lease agreements for biological assets held by lessees under finance leases, including measurement of these teases