CLFP EXAM - Financial and Tax Accounting for Leases Questions and Correct Verified Answers Latest Version
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Course
CLFP
Institution
CLFP
What is a primary goal of the accounting profession?
Consistent treatment of like transactions to allow clarity in presentation
and consistency in interpretation of financial statements prepared by
various individuals or entities.
How did APB (Accounting Principals Board) fail?
Created Opi...
CLFP EXAM - Financial and Tax
Accounting for Leases Questions
and Correct Verified Answers Latest
Version
What is a primary goal of the accounting profession?
✓ Consistent treatment of like transactions to allow clarity in presentation
and consistency in interpretation of financial statements prepared by
various individuals or entities.
How did APB (Accounting Principals Board) fail?
✓ Created Opinion #5 (Reporting of Leases in Financial Statements of
Lessees) and Opinion #7 (Accounting for Leases in Financial
Statements for Lessors) that ha different opinions and left lessors &
lessees with conflicting rules.
What was FASB 13?
✓ Financial Accounting Standards Board issued "Accounting for Leases"
which was a comprehensive set of standards to be followed by lessors
✓ The price at which the property could be sold at an arm's length
transaction by unrelated parties.
✓ 1.) normal selling price, net volume discounts, for a lessor who
manufacturer/dealer
✓ 2.) Cost, net volume discounts for a lessor that is note a manufacturer
or dealer.
What is Implicit Interest Rate?
✓ The discount rate that, when applied to the minimum lease payments
cause the aggregate present value at the beginning of the lease term
to be equal to the fair value of the leased property to the lessor at the
inception of the lease.
What is Inception of the Lease?
✓ The date lease commitment.
What is Incremental Borrowing Rate?
✓ The rate, at the inception of the lease, the lessee would have incurred
to borrow, under like terms, the funds necessary to purchase the lease
asset.
Master01 | September, 2024/2025 | Latest update
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