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CA Inter AS 19 Leases — practice questions

Explore 80 free AS 19 Leases questions in CA Inter Accounting. Open each question or exercise to read its content, reference answers and available explanation.

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AS 19 Leases questions and exercises with answers

Showing questions 1–30 of 80.

AS 19 prescribes accounting for which two lease types?Read the answer and worked solution →Which of these arrangements is excluded from the scope of AS 19?Read the answer and worked solution →Licensing agreements for patents and copyrights are treated under AS 19 asRead the answer and worked solution →AS 19 does not apply to lease agreements to explore for which resources?Read the answer and worked solution →Under AS 19, a lease conveys to the lessee the right to use an asset forRead the answer and worked solution →A finance lease is one that transfers substantially all theRead the answer and worked solution →AS 19 defines an operating lease asRead the answer and worked solution →Whether a lease is a finance or operating lease depends on substance rather than itsRead the answer and worked solution →At what point is a lease classified under AS 19?Read the answer and worked solution →Lease inception is the earlier of the agreement date and the dateRead the answer and worked solution →A renewal option period is part of the lease term only if, at inception, exercise by the lessee isRead the answer and worked solution →Rent calculated as a percentage of the lessee's sales is calledRead the answer and worked solution →Minimum lease payments excludeRead the answer and worked solution →For a lessee, minimum lease payments include residual value that isRead the answer and worked solution →A lessor counts a third-party guarantee only if the guarantor isRead the answer and worked solution →A certain-to-be-used purchase option adds to minimum paymentsRead the answer and worked solution →AS 19 fair value is the exchange amount betweenRead the answer and worked solution →The residual value of a leased asset is the estimatedRead the answer and worked solution →Unguaranteed residual value equals the residual value minus theRead the answer and worked solution →Gross investment equals lessor's minimum lease payments plusRead the answer and worked solution →Net investment in the lease equals gross investment lessRead the answer and worked solution →Unearned finance income is gross investment less the present value ofRead the answer and worked solution →The implicit rate discounts payments and residual to equal theRead the answer and worked solution →The lessee's incremental borrowing rate is the rate to borrow, over a similar term, funds needed toRead the answer and worked solution →Hire purchase agreements are, under AS 19,Read the answer and worked solution →Contracts for services that do not transfer the right to use assets areRead the answer and worked solution →A non-cancellable lease can be cancelled only in which situation?Read the answer and worked solution →Risks incident to ownership include losses from idle capacity andRead the answer and worked solution →Rewards of ownership may be shown by profitable operation over economic life andRead the answer and worked solution →In a finance lease, title to the assetRead the answer and worked solution →

Worked practice questions

AS 19 prescribes accounting for which two lease types?

  1. Finance leases and bailments
  2. Operating leases and licences
  3. Finance leases and operating leases
  4. Hire purchase and instalment sales
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Correct answer: C. Finance leases and operating leases

The objective clause names finance leases and operating leases as the two types whose accounting and disclosure it covers.

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Which of these arrangements is excluded from the scope of AS 19?

  1. Hire of motor vehicles
  2. Lease of an aircraft
  3. Lease of plant and machinery
  4. Lease agreements to use lands
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Correct answer: D. Lease agreements to use lands

Scope paragraph 1(c) leaves out lease agreements to use lands, while equipment and vehicle leases are covered.

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Licensing agreements for patents and copyrights are treated under AS 19 as

  1. Sale and leaseback
  2. Operating leases
  3. Excluded from AS 19
  4. Finance leases
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Correct answer: C. Excluded from AS 19

Licensing agreements for items such as films, manuscripts, patents and copyrights are specifically carved out of the Standard.

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More Accounting topics

AS 3 Cash Flow StatementSchedule III Division I Financial StatementsValuation of Inventories (AS 2)AS 22 Taxes on IncomeAS 28 Impairment of AssetsProperty, Plant and EquipmentAS 17 Segment ReportingAS 13 Accounting for Investments