Clfp exam - financial and tax accounting for leases (2025) comprehensive questions and
verified answers (detailed & elaborated) actual exam 2025 test!!
What authority defines what a lease is for legal purposes?
a. IRS
b. Common law
c. UCC
d. Bankruptcy Code - -c. UCC
--What is the significance of Revenue Procedure 2001-28?
a. It lays out criteria the IRS would use to respond to advanced rulings on whether a
transaction is a lease.
b. It lays out criteria the FASB would use to respond to advanced rulings on whether a
transaction is a lease.
c. In the context of equipment financing, it has no significance.
d. It lays out criteria the IRS would use to respond to advanced rulings on whether a
transaction is a loan. - -a. It lays out criteria the IRS would use to respond to advanced
rulings on whether a transaction is a lease.
--Order the given events in the sequence in which they occurred.
A. Investment Tax Credit (ITC) introduced
B. Independent third-party leasing and finance companies formed
C. FASB 13
D. IRS Section 167 issued - -BDAC
--What is a Capital Lease?
a. A lease that has the characteristics of a usage agreement, as defined by ASC 842.
b. A lease that has the characteristics of a purchase agreement, as defined by ASC 842.
c. A lease that has the characteristics of a true lease, as defined by UCC.
d. A lease that has the characteristics of a secured transaction, as defined by UCC. - -b. A
lease that has the characteristics of a purchase agreement, as defined by ASC 842.
--What are the three main sources of U.S. law?
a. State, Federal and Common
b. Federal, Case, and Regulatory
c. Case, Statutory, and Regulatory
d. State, Statutory, and Regulatory - -C. Case, Statutory, and Regulatory
--Where is the legal definition of what is NOT a "Lease" found?
a. UCC Article 2-202
b. UCC Article 1-203
c. UCC Article 2A-209
d. UCC Article 9-306 - -b. UCC Article 1-203
, --An additional level of due diligence for the third-party origination channel and the vendor
origination channel is the following:
a. Source credit approval process
b. Customer site inspections
c. Enhanced source due diligence
d. Enhanced customer due diligence - -a. Source credit approval process
--In addition to current ratios and cash flow calculations, credit analysts should evaluate
trends over a ________________period. Although it is important to note changes year over
year, any trend analysis done with less information is considered very limited.
a. Three or four-year
b. Six or seven-year
c. Five or six-year
d. Two or three-year - -a. Three or four-year
--The following ratios cannot be viewed by themselves as either positive or negative.
a. Return on sales and accounts payable turnover in days
b. Return on sales and return on equity
c. Return on assets and return on equity
d. Return on assets and return on sales - -c. Return on assets and return on equity
--Net Income / Total Assets
a. Gross profit margin
b. Operating profit margin
c. Return on assets
d. Net profit margin - -c. Return on assets
--Current Assets / Current Liabilities
a. Accounts receivable turnover
b. Inventory turnover
c. Quick ratio
d. Current ratio - -d. Current ratio
--( Average Inventory / Cost of Goods Sold ) * 365
a. Accounts receivable turnover
b. Current ratio
c. Inventory turnover
d. Quick ratio - -c. Inventory turnover
verified answers (detailed & elaborated) actual exam 2025 test!!
What authority defines what a lease is for legal purposes?
a. IRS
b. Common law
c. UCC
d. Bankruptcy Code - -c. UCC
--What is the significance of Revenue Procedure 2001-28?
a. It lays out criteria the IRS would use to respond to advanced rulings on whether a
transaction is a lease.
b. It lays out criteria the FASB would use to respond to advanced rulings on whether a
transaction is a lease.
c. In the context of equipment financing, it has no significance.
d. It lays out criteria the IRS would use to respond to advanced rulings on whether a
transaction is a loan. - -a. It lays out criteria the IRS would use to respond to advanced
rulings on whether a transaction is a lease.
--Order the given events in the sequence in which they occurred.
A. Investment Tax Credit (ITC) introduced
B. Independent third-party leasing and finance companies formed
C. FASB 13
D. IRS Section 167 issued - -BDAC
--What is a Capital Lease?
a. A lease that has the characteristics of a usage agreement, as defined by ASC 842.
b. A lease that has the characteristics of a purchase agreement, as defined by ASC 842.
c. A lease that has the characteristics of a true lease, as defined by UCC.
d. A lease that has the characteristics of a secured transaction, as defined by UCC. - -b. A
lease that has the characteristics of a purchase agreement, as defined by ASC 842.
--What are the three main sources of U.S. law?
a. State, Federal and Common
b. Federal, Case, and Regulatory
c. Case, Statutory, and Regulatory
d. State, Statutory, and Regulatory - -C. Case, Statutory, and Regulatory
--Where is the legal definition of what is NOT a "Lease" found?
a. UCC Article 2-202
b. UCC Article 1-203
c. UCC Article 2A-209
d. UCC Article 9-306 - -b. UCC Article 1-203
, --An additional level of due diligence for the third-party origination channel and the vendor
origination channel is the following:
a. Source credit approval process
b. Customer site inspections
c. Enhanced source due diligence
d. Enhanced customer due diligence - -a. Source credit approval process
--In addition to current ratios and cash flow calculations, credit analysts should evaluate
trends over a ________________period. Although it is important to note changes year over
year, any trend analysis done with less information is considered very limited.
a. Three or four-year
b. Six or seven-year
c. Five or six-year
d. Two or three-year - -a. Three or four-year
--The following ratios cannot be viewed by themselves as either positive or negative.
a. Return on sales and accounts payable turnover in days
b. Return on sales and return on equity
c. Return on assets and return on equity
d. Return on assets and return on sales - -c. Return on assets and return on equity
--Net Income / Total Assets
a. Gross profit margin
b. Operating profit margin
c. Return on assets
d. Net profit margin - -c. Return on assets
--Current Assets / Current Liabilities
a. Accounts receivable turnover
b. Inventory turnover
c. Quick ratio
d. Current ratio - -d. Current ratio
--( Average Inventory / Cost of Goods Sold ) * 365
a. Accounts receivable turnover
b. Current ratio
c. Inventory turnover
d. Quick ratio - -c. Inventory turnover
