Question 1
What authority defines what a lease is for accounting purposes?
Select one:
a. Financial Assets Standards Board
b. Financial Accounting Services Board
c. Flavored Apples Standards Board
d. Financial Accounting Standards Board
CORRECT ANSWER
d. Financial Accounting Standards Board (FASB)
Question 2
What authority defines what a lease is for legal purposes?
Select one:
a. UCC
b. IRS
c. Bankruptcy Code
d. Common law
CORRECT ANSWER
a. UCC
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,Question 3
What section of the IRS Code defines what is not a lease, for tax purposes?
Select one:
a. IRS 8401-77
b. IRS 55-540
c. IRS 2001-28
d. IRS 842-2A
CORRECT ANSWER
b. IRS 55-540
Question 4
What is a Capital Lease?
Select one:
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.
CORRECT ANSWER
b. A lease that has the characteristics of a purchase agreement, as defined by ASC 842
Question 5
What is the significance of Revenue Procedure 2001-28?
Select one:
a. It lays out criteria the IRS would use to respond to advanced rulings on whether a
transaction is a lease.
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, b. It lays out criteria the IRS would use to respond to advanced rulings on whether a
transaction is a loan.
c. It lays out criteria the FASB would use to respond to advanced rulings on whether a
transaction is a lease.
d. In the context of equipment financing, it has no significance.
CORRECT ANSWER
a. It lays out criteria the IRS would use to respond to advanced rulings on whether a
transaction is a lease.
Question 6
How long is the term of a Rental Agreement (AKA short-service lease)?
Select one:
a. Less than 12 months
b. Less than 1 month
c. Less than 3 months
d. Less than 6 months
CORRECT ANSWER
a. Less than 12 months
Question 7
What does "TRAC" stand for when referring to a TRAC Lease?
Select one:
a. Terminal Rental Adjustment Clause
b. Terminus Rent Amendment Clause
c. Terminal Rent Alteration Clause
d. Terminus Rental Amendment Change
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What authority defines what a lease is for accounting purposes?
Select one:
a. Financial Assets Standards Board
b. Financial Accounting Services Board
c. Flavored Apples Standards Board
d. Financial Accounting Standards Board
CORRECT ANSWER
d. Financial Accounting Standards Board (FASB)
Question 2
What authority defines what a lease is for legal purposes?
Select one:
a. UCC
b. IRS
c. Bankruptcy Code
d. Common law
CORRECT ANSWER
a. UCC
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,Question 3
What section of the IRS Code defines what is not a lease, for tax purposes?
Select one:
a. IRS 8401-77
b. IRS 55-540
c. IRS 2001-28
d. IRS 842-2A
CORRECT ANSWER
b. IRS 55-540
Question 4
What is a Capital Lease?
Select one:
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.
CORRECT ANSWER
b. A lease that has the characteristics of a purchase agreement, as defined by ASC 842
Question 5
What is the significance of Revenue Procedure 2001-28?
Select one:
a. It lays out criteria the IRS would use to respond to advanced rulings on whether a
transaction is a lease.
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@THE STUDY VAULT
, b. It lays out criteria the IRS would use to respond to advanced rulings on whether a
transaction is a loan.
c. It lays out criteria the FASB would use to respond to advanced rulings on whether a
transaction is a lease.
d. In the context of equipment financing, it has no significance.
CORRECT ANSWER
a. It lays out criteria the IRS would use to respond to advanced rulings on whether a
transaction is a lease.
Question 6
How long is the term of a Rental Agreement (AKA short-service lease)?
Select one:
a. Less than 12 months
b. Less than 1 month
c. Less than 3 months
d. Less than 6 months
CORRECT ANSWER
a. Less than 12 months
Question 7
What does "TRAC" stand for when referring to a TRAC Lease?
Select one:
a. Terminal Rental Adjustment Clause
b. Terminus Rent Amendment Clause
c. Terminal Rent Alteration Clause
d. Terminus Rental Amendment Change
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