1. Which is the most correct journal entry for the lessor, when the lessee makes an upfront payment?

a -

Dr Cash

Cr Operating lease income receivable

b -

Dr Cash

Cr Unearned operating lease income

c -

Dr Depreciation expense

Cr Accumulated depreciation (AD)

2. Which situation about the finance lease is wrong?

a - Lease transfers ownership to the lessee by end of the lease term.

b - The lessee has the option to purchase the lease at end of the lease term.

c - The lessee does not have the option to purchase the lease at the end of the lease term.

3. What is Unguaranteed Residual Value (UGRV)?

a- Portion of the RV of the underlying asset, the realisation of which by the lessee is not assured or is guaranteed solely by a party related to the lessor, i.e., that portion of the RV of the underlying asset that is not the responsibility of the lessee (opposite of the RVG)

b- As part of a lease agreement, the lessee may provide a URVG. This means, when the lessee returns the underlying asset to the lessor at the end of the lease term, the lessee is guaranteeing that the value (or part of the value) of the underlying asset will be at least a specified amount.

c- Portion of the RV of the underlying asset, the realisation of which by the lessor is not assured or is guaranteed solely by a party related to the lessor, i.e., that portion of the RV of the underlying asset that is not the responsibility of the lessee (opposite of the RVG)

4. The definition of the lessor is_.

a - An entity that provides the right to use an underlying asset for a period of time in exchange for consideration.

b - An entity that obtains the right to use an underlying asset for a period of time in exchange for consideration

c - A contract, or part of a contract, that conveys the right to use an asset for a period of time in exchange for consideration.

d - None of the answers is correct

5. True or False: The depreciation policy used by a lessor for depreciable underlying leases subject to operating leases must be consistent with the lessors normal depreciation policies for similar assets

- true

- false

6. Which is Incorrect ? After the commencement date, a lessee shall measure the lease liability by:

a) The lessee shall recognise the lease payments associated with those leases as an expense on either a straight-line (SL) basis over the lease term.

b) Reflect interest on the lease liability.

c) Remeasuring the carrying amount to reflect any reassessment or lease modifications or to reflect revised in-substance fixed lease payments.

d) Reducing the carrying amount to reflect the lease payments made.

7. How would a lessee recognise the lease if they meet the requirements of the two exemptions?

a)

Dr Lease expense

Cr Cash

b)

Dr Cash

Cr Lease Expense

c)

Dr Lease expense

Cr PPE

Please answer all the questions

thanks!