Initial direct costs incurred by the lessor in an operating lease should be
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34
Initial direct costs incurred by the lessor in an operating lease should be
A. expensed in the year of incurrence by including them in the cost of goods sold or by treating them as a selling
expense.
B. deferred and recognized as reduction in the interest rate implicit in the lease.
C. capitalized as part of asset cost and
D. deferred and carried on the
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- t34 Initial direct costs incurred by the lessor in an operating lease should beA. expensed in the year of incurrence by including them in the cost of goods sold or by treating them as a sellingexpense.B. deferred and recognized as reduction in the interest rate implicit in the lease.C. capitalized as part of asset cost and depreciated over the lease term.D. deferred and carried on the statement of financial position until the end of the lease term.41. The basic difference between a direct-financing lease and a sales-type lease is the allocation of initial direct costs by the lessor to periods benefited by the lease arrangements. recognition of the profit on the sale. amount of the depreciation recorded each year by the lessor. manner in which rental receipts are recorded as rental income.27 In IFRS 16 par. 74, initial direct costs incurred by a lessor in consummating a manufacturer’s or dealer’s lease areA. charged to unearned income in the first period of the lease term.B. charged to expense in the first period of the lease term.C. deferred and allocated over the lease term in proportion to the recognition of rent revenue.D. deferred and allocated over the lease term on a straight-line basis.
- 9.When a company sells property and then leases it back, any gain on the sale should usually be Select one: a. recognized in the current year. b. recognized at the end of the lease. c. deferred and recognized as income over the term of the lease. d. recognized as a prior period adjustment.29 Lessors shall recognize assets held under a finance lease in a statement of financial position as a receivable at an amount equal to theA. gross investment in the lease B. net investment in the lease C. gross rentals D. residual value, whether guaranteed or unguaranteed22 Lessors are required to account for lease receipts from operating leases asA. revenue, on a reducing balance over the lease term.B. income, on inception date of the lease.C. income, on a straight-line basis over the lease term.D. revenue, at the end of the lease term.
- 24 In a lease that is recorded as a manufacturer’s or dealer’s lease by the lessor, interest revenue should beA. recognized in full as revenue at the lease’s inception.B. recognized over the period of the lease using the straight-line method C. recognized over the period of the lease using the interest method.D. not be recognized in the accounts.31 The interest rate implicit in the lease is the discount rate that causes the aggregate of the present value of the minimum lease payments and the unguaranteed residual value to be equal to theA. fair value of the leased asset.B. fair value of the leased asset and initial direct costs of the lessor.C. fair value of the leased asset and initial direct costs of the lessee.D. gross investment in the lease.32 The cost of sales recognized at the commencement of the lease term by a manufacturer or dealer is equal toA. carrying amount of the leased asset.B. carrying amount of the leased asset minus the unguaranteed residual value in absolute amount.C. carrying amount of the leased asset minus the present value of the unguaranteed residual value.D. carrying amount of the leased asset minus the present value of the guaranteed residual value.
- 26 If title is not expected to pass to the lessee by the end of the lease term, lease of land is classified asA. operating lease.B. either operating lease or finance lease.C. finance lease.D. neither operating lease nor finance lease.33 Gross investment in the lease is equal toA. the minimum lease payments receivable by the lessor.B. the unguaranteed residual value accruing to the lessor.C. both the minimum lease payments receivable by the lessor under a finance lease and the unguaranteed residual value accruing to the lessor.D. neither the minimum lease payments receivable by the lessor under a finance lease nor the unguaranteed residual value accruing to the lessor.44. new..recheck The right-of-use asset is increased by lease prepayments made by the lessee and initial direct costs incurred by the lessee. initial direct costs incurred by the lessee only. lease incentives received. prepaid lease payments only.