ACC422 UPDATED Exam Questions And CORRECT Answers

Accounting for Operating Leases under ASC 842 (Lessor) 1 Cash annual pmt amt Unearned Rev annual pmt amt 2 Unearned Rev annual pmt amt Lease Rev annual pmt amt Deprec Exp Acc Deprec *depreciates over economic life, straight-line Why do lesees structure its lease agreements in such a way that it reported operating leases, instead of capital leases, for financial reporting purposes (under ASC 840)? to keep lease assets and lease liabilities off the balance, which lowers the debt to equity ratio Why do lessees structure its lease agreements in such a way that it was considered the owner of the plant for tax purposes? In order to be eligible for the depreciation tax deductions, which reduces tax payment and cash outflows