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CA Inter AS 19 Leases — practice questions — page 3

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 61–80 of 80.

A lessor's initial direct costs on a finance lease are expensed orRead the answer and worked solution →Dealer lessor's artificially low rate limits selling profit to that atRead the answer and worked solution →A manufacturer lessor on a finance lease earns selling profit andRead the answer and worked solution →Manufacturer lessor's revenue is fair value or, if lower, PV atRead the answer and worked solution →Cost of sale for a manufacturer lessor is asset cost less PV ofRead the answer and worked solution →A lessor presents an asset given on operating lease underRead the answer and worked solution →Operating lease income of a lessor is recognised onRead the answer and worked solution →Operating lessor's direct costs are expensed or deferred andRead the answer and worked solution →Depreciation of assets given on operating lease follows the lessor'sRead the answer and worked solution →A sale and leaseback involves selling an asset andRead the answer and worked solution →Finance leaseback: excess of proceeds over carrying amount isRead the answer and worked solution →An operating leaseback at fair value gives a profit that isRead the answer and worked solution →Operating leaseback above fair value: the excess isRead the answer and worked solution →Asset sold at fair value Rs 6 lakh, carrying amount Rs 8 lakh, operating leaseback. Loss recognised at once?Read the answer and worked solution →Leaseback below fair value, loss offset by cheap rentals, isRead the answer and worked solution →In a finance leaseback, the carrying amount is written down only if there isRead the answer and worked solution →Which must a lessor disclose for finance leases?Read the answer and worked solution →A lessor on finance leases also discloses accumulated provision forRead the answer and worked solution →For a lessee, the amount of a residual value guarantee is theRead the answer and worked solution →Leaving a finance lease off the lessee's balance sheet understates obligations and distortsRead the answer and worked solution →

Worked practice questions

A lessor's initial direct costs on a finance lease are expensed or

  1. Added to leased asset cost
  2. Set against residual value
  3. Allocated against finance income
  4. Added to lessee's liability
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Correct answer: C. Allocated against finance income

Such costs are produced to earn finance income, so they are expensed at once or allocated against that income over the term.

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Dealer lessor's artificially low rate limits selling profit to that at

  1. Finance income only
  2. A commercial rate
  3. A zero profit level
  4. The asset's full cost
Show answer and solution

Correct answer: B. A commercial rate

A low quoted rate would pull too much income into the sale, so profit is restricted to what a commercial rate would give.

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A manufacturer lessor on a finance lease earns selling profit and

  1. Rent income on lease
  2. Finance income over term
  3. Amortised deferred gain
  4. Depreciation recovery
Show answer and solution

Correct answer: B. Finance income over term

The two income types are sale-equivalent profit and finance income over the term.

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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