ACG 3113 Lease Accounting GAAP & IFRS Q&A (2026) – 34 Exam Questions and Verified Answers

This document contains 34 multiple-choice exam questions with verified answers covering lease accounting under U.S. GAAP and IFRS for ACG 3113. It comprehensively addresses operating vs capital (finance) leases, lessee and lessor accounting treatment, lease classification criteria, residual value guarantees, executory costs, leveraged leases, sales-type and direct-financing leases, ratio effects, off-balance sheet financing, constructive capitalization, and the FASB/IASB right-of-use model. The material also includes key disclosure requirements, financial statement impacts, and analytical implications for comparing firms. The questions are structured to reflect exam-level difficulty and conceptual understanding required in intermediate financial accounting courses. It integrates theoretical foundations with practical applications such as present value measurement, discount rate selection, depreciation treatment, gain recognition in sale-leaseback transactions, and IFRS finance lease indicators. The content aligns closely with standard intermediate accounting textbooks, particularly Intermediate Accounting by Kieso, Weygandt, and Warfield, as well as Financial Accounting by Libby, Libby, and Hodge, especially chapters on lease accounting and revenue recognition frameworks. This document is highly relevant for students enrolled in: Bachelor of Science in Accounting Bachelor of Science in Finance Bachelor of Business Administration Accounting and Financial Management programs It is especially beneficial for: Intermediate Accounting I or II students Students preparing for midterm or final examinations in lease accounting CPA review candidates Learners studying GAAP vs IFRS differences Students analyzing financial statement ratios and off-balance sheet financing Keywords: lease accounting, operating lease, capital lease, finance lease, GAAP lease criteria, IFRS lease classification, right of use asset, lease liability, residual value guarantee, executory costs, sales type lease, direct financing lease, leveraged lease, sale leaseback accounting, lease disclosures, constructive capitalization, lease present value, incremental borrowing rate, implicit lease rate, financial statement ratios, off balance sheet financing