1. A short-term lease:

a. Is defined as having a lease term of fifteen months or less

b. Cannot be accounted for by the short-cut method if using IFRS.

c. Is defined as having a value of $10,000 or less

d. Can be accounted for by the short-cut method if using U.S. GAAP.

2. The primary difference between a sales-type lease without selling profit and with selling profit is the

a. amount of the depreciation recorded each year by the lessor.

b. manner in which rental receipts are recorded as rental income.

c. allocation of initial direct costs by the lessor to periods benefited by the lease arrangements.

d. recognition of the selling profit at the inception of the lease.

3. The lessee normally measures the lease liability to be recorded as the:

a. Fair market value of the leased asset.

b. Present value of the lease payments.

c. Future value of the minimum lease payments.

d. Sum of the cash payments over the term of the lease.