In a sale and leaseback transaction, which of the following statements is most incorrect?
Q: The difference between book value of the asset with the proceeds receive from its sale, with result…
A: Assets: It refers to the economic value of all resources owned by the business at a given point in…
Q: receivables not measured initially at their transaction price are measured initially at a. fair…
A: Financial Asset or Receivables: The financial Asset or Receivables is measured initially at fair…
Q: In a sale-leaseback transaction the owner of an asset sells it and immediately leases it back from…
A: Sale-Leaseback approach: In the sale-leaseback approach, the owner of the leased asset sells it and…
Q: The amount of gain (loss) on sale and leaseback transaction is: Group of answer choices The…
A: Sales and lease back transaction refers to the transaction where an asset is sold by the seller to a…
Q: Using the Traditional Sales Comparison Approach, an appraiser would not adjust the sales price of…
A: Traditional Sales Comparison Approach: It is referred to as the sales comparison methodology in real…
Q: When recognizing revenue, a company has satisfied its performance obligation when the company has O…
A: The concept of Revenue recognition applies to both goods and services.
Q: Gross selling price includes: I. the amount of the seller's debt assumed by the buyer. II. the fair…
A: Selling price means the rate at which the goods are sold or services are provided by the…
Q: Which of the following statements is true? a. Borrowing costs are generally expensed except when…
A: Accounting principles are general rules and guidelines that the company follows while recording and…
Q: lessee
A: Lease is a financial arrangement where the right to use the asset is given by the owner to another…
Q: One of the following statements is false: a. If the underlying asset will not revert to the…
A: A lease is a contract which provides the right to use an asset for consideration for a specified…
Q: TRUE OR FALSE The principle of historical cost states that acquired assets should be recorded at…
A: Historical Cost:-As per this principle according to the US GAAP, assets should be recorded in the…
Q: Which statement is correct regarding derecognition of financial assets? A. Transfer of risks and…
A: The process of derecognizing financial assets in which the entity fully transfers the asset and all…
Q: This is an arrangement in which one party sells a property to a buyer and the buyer immediately…
A: solution: Sale and leaseback is an arrangement in which one party sells a property to a buyer and…
Q: If deposit for lease contract was recorded as Rent Expense,
A: Rent deposit is the deposit made by the tenant to the landlord. Rent deposit will be held by the…
Q: The amount for which an asset could be exchanged, a liability settled , or an equity instrument…
A: The amount for which an asset could be exchanged, a liability settled , or an equity instrument…
Q: Which of the following is not true with a broker اخترأحد الخيارات a. Maintains inventories and takes…
A: Broker is an individual which functions to execute the investment decisions of the investor.
Q: The gain/loss related to a sale and leaseback transaction not recognized by the seller-lessee in its…
A: Rights retained .. The gain or the loss relating to a sale and leaseback transaction not recognized…
Q: Purchase commitments A. Are obligations of the company to acquire certain goods at a fixed price…
A: Purchase commitment means where we agree to buy particular goods at particular price in future what…
Q: Which one of the following is not an advantage of leasing fixed asset? a. Repairs and maintenance…
A: The basic concept of lease contract is there are mainly two parties involving in this lease…
Q: Discuss the residual value of the leased asset. How does it impact the PV of rental payments…
A: Lease means a type of agreement in which one party gives its valuable assets to other party for a…
Q: loses significant influence over the associate, the balance of the investment in the associate is…
A: When the company has significant influence over the associate, then equity method should be used for…
Q: How should the assets and liabilities of a disposal group held for sale be reported? A. The assets…
A: A disposal group is a group of assets and liabilities that are proposed to be sold off or discarded…
Q: which statements is incorrect regarding for value measurements? a. fair value is normally the…
A: Fair value is the price that would be received to sell the asset or paid to transfer the liability…
Q: How does the analysis of a sale-leaseback differ from the analysis of owning versus leasing?
A: A sale lease back is very beneficial for the company because it helps the company to sell the asset…
Q: right of use asset
A: Correct Answer :- C Sale price
Q: Which of the following is not true in regard to selling fixed assets? a.If the selling price is more…
A: The journal entry for sale of fixed asset Cash A/C dr (sale amount) Loss on sale (if bookvalue >…
Q: The amount of gain (loss) on sale and leaseback transaction is: A. The difference of fair value and…
A: Gain is booked when money is received on the sale of the asset. leasing back can be assumed to be…
Q: The buyer-lessor recognizes the asset from a sale and leaseback transaction resulting to a finance…
A: The buyer-lessor recognizes the asset from a sale and leaseback transaction resulting to a finance…
Q: The contract in which the buyer has the right but not an obligation to buy or sell and underlying…
A: Option contract refers to the contract in which buyer or seller is having right but not an…
Q: Which is the proper way to report a contingent asset? a. As an asset b. No disclosure and no…
A:
Q: When is revenue recognized in the following situations?(a) Revenue from selling products, (b)…
A:
Q: Which of the following is an example of faithful representation? A Showing lease payments as a…
A:
Q: In a sale and leaseback transaction, what is used by the buyer-lessor to depreciate the cost of the…
A: 1.(B) TOTAL USEFUL LIFE.…
Q: Which of the following case would allow the capitalization of Interest Expense No Case allows…
A: Interest will be capitalised only when the concerned assets is under preparation for its use in…
Q: What is an impairment loss? A ) The amount by which the carrying amount of an asset exceeds the…
A: An impairment loss is a recognized decrease in the par value of an asset caused by a deterioration…
Q: contract purporting to
A: Statement I: In case of doubt, a contract purporting to be a sale with right of repurchase is…
Q: b. The rent is treated as a liability because it is unearned. The rental agency owes the tenant the…
A: for an asset that is given on lease, the lease rentals which is received from the customer in…
Q: When an asset is acquired and a note payable is assumed, explain how acquisition cost of the asset…
A:
Q: The generally accepted accounting principle that supports recording the value of a property at the…
A: Monetary principle says that a business should only record transaction if it is measured in monetary…
In a sale and leaseback transaction, which of the following statements is most incorrect?
A. The seller-lessee records a rent expense.
B. The buyer-lessor recognizes an gain.
C. The seller-lessee derecognizes an asset.
D. The buyer lessor recognizes an income.
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- When a company sells an asset and simultaneously leases it back, what criteria must be met to apply saleleaseback accounting rather than accounting for the transaction as a loan ?When assets are purchased under an installment sales contract, the seller becomes the creditor. A. True B. FalseHow does the analysis of a sale-leaseback differ from the analysis of owning versus leasing?
- When assets are purchased under an installment sales contract, the seller becomes the creditor. True or False?The amount of gain (loss) on sale and leaseback transaction is: A. The difference of fair value and carrying of the underlying asset. B. The difference of the fair value of rights retained by the lessee and the carrying value of right-of use asset. C. The difference of the fair value of rights retained by the lessee and the carrying value of rights transferred to the lessor. D. The difference of the fair value of rights transferred to the lessor and carrying value of rights transferred to the lessor.In a sale-leaseback transaction the owner of an asset sells it and immediately leases it back from the new owner. This dual transaction should be viewed as a single borrowing transaction. Why?
- The generally accepted accounting principle that supports recording the value of a property at the purchase price when the market value is higher is the: A. conservatism principle B. going concern principle C. monetary principle D. cost principleFor a(n) ________ lease, a lessor recognizes revenue on the sale and records the asset, ________ lease. It also removes the leased asset from its accounts and records the ________. Group of answer choices sales-type; net investment in lease–sales-type; cost of goods sold finance; gross investment in lease–sales-type; cost of goods sold operating; net investment in lease–sales-type; cost of goods sold sales-type; finance; revenueOne of the following statements is false: a. If the underlying asset will not revert to the lessor, the residual value is simply ignored by the lessor in the computation of unearned interest income and gross profit on the sale. b. The underlying asset will remain with the lessee if the lease provides for either a purchase option that is reasonably to be exercised or transfer of title to the lessee upon the lease expiration. c. When a lessor actually sells an asset that it has been leasing, the difference between the sales price and the carrying amount of the lease receivable is recognized in profit or loss. d. The gain or loss that pertains to the right retained by the seller-lessee in a sales and leaseback transaction is not recognized.
- The amount of gain (loss) on sale and leaseback transaction is: Group of answer choices The difference of the fair value of rights retained by the lessee and the carrying value of right-of-use asset. The difference of the fair value of rights transferred to the lessor and carrying value of rights transferred to the lessor. The difference of fair value and carrying of the underlying asset. The difference of the fair value of rights retained by the lessee and the carrying value of rights transferred to the lessor.1. In a sale and leaseback transaction, what is used by the buyer-lessor to depreciate the cost of the leased asset? A. Lease term B. Total Useful life C. Excess of useful life over the lease term D. Remaining useful life 2. Which of the following scenarios regarding a sale and leaseback transaction would result to a loss to the seller-lessee? A. Fair Value < Carrying Amount B. Sale Price < Fair Value C.Sale Price > Fair Value D.Fair Value > Carrying Amount 3. When does a buyer-lessor recognize a financial asset from a sale and leaseback transaction? A. Sale Price > Fair Value B. Fair Value < Carrying Amount C. Sale Price < Fair Value D. Fair Value > Carrying AmountWhat is the effect of loss of the thing or object in a contract of sale?
