Chapter 27 Leasing

A) lessee.
B) lessor.
C) guarantor.
D) trustee.
E) manager.



Question Details
Accessibility : Keyboard Navigation
Topic : Leasing
Section : 27.1 Leases and Lease Types
Difficulty : 1 Basic
AACSB : Reflective Thinking
Bloom's : Remember
Learning Objective : 27-01 Define the types of leases and how the IRS qualifies leases.
Accessibility : Screen Reader Compatible




2) The party who uses a leased asset is called the:
2)


A) lessee.
B) lessor.
C) guarantor.
D) trustee.
E) manager.



Question Details
Accessibility : Keyboard Navigation
Topic : Leasing
Section : 27.1 Leases and Lease Types
Difficulty : 1 Basic
AACSB : Reflective Thinking
Bloom's : Remember
Learning Objective : 27-01 Define the types of leases and how the IRS qualifies leases.
Accessibility : Screen Reader Compatible

,3) Carley has leased a treadmill from Village Leasing for a period of one year. Village pays
the maintenance, taxes, and insurance costs for this equipment. The life of the equipment is
seven years. Carley has a(n) lease.

3)


A) open
B) straight
C) operating
D) financial
E) tax-oriented



Question Details
Accessibility : Keyboard Navigation
Topic : Types of leases
Section : 27.1 Leases and Lease Types
Difficulty : 1 Basic
AACSB : Reflective Thinking
Learning Objective : 27-01 Define the types of leases and how the IRS qualifies leases.
Bloom's : Understand
Accessibility : Screen Reader Compatible




4) Anusha has a fully amortized 10-year lease on some heavy equipment. The lease requires
her to pay all taxes, maintenance costs, and insurance premiums related to this lease. Which type
of lease is this?

4)


A) Open
B) Straight
C) Operating
D) Financial
E) Tax-oriented

,Question Details
Accessibility : Keyboard Navigation
Topic : Types of leases
Section : 27.1 Leases and Lease Types
Difficulty : 1 Basic
AACSB : Reflective Thinking
Learning Objective : 27-01 Define the types of leases and how the IRS qualifies leases.
Bloom's : Understand
Accessibility : Screen Reader Compatible




5) A financial lease in which the lessor is the owner for tax purposes is called a(n)
lease.
5)


A) open
B) straight
C) operating
D) tax-oriented
E) tax-exempt



Question Details
Accessibility : Keyboard Navigation
Topic : Types of leases
Section : 27.1 Leases and Lease Types
Difficulty : 1 Basic
AACSB : Reflective Thinking
Bloom's : Remember
Learning Objective : 27-01 Define the types of leases and how the IRS qualifies leases.
Accessibility : Screen Reader Compatible




6) Equipment Rentals borrows money on a nonrecourse basis to fund its purchases of
construction equipment. This equipment is then leased to contractors. The leases are classified as
tax-oriented leases. Which one of the following terms best describes one of these leases?
6)

, A) Leveraged lease
B) Sale and leaseback arrangement
C) Single-investor lease
D) Perpetual lease
E) Straight lease



Question Details
Accessibility : Keyboard Navigation
Topic : Types of leases
Section : 27.1 Leases and Lease Types
Difficulty : 1 Basic
AACSB : Reflective Thinking
Learning Objective : 27-01 Define the types of leases and how the IRS qualifies leases.
Bloom's : Understand
Accessibility : Screen Reader Compatible




7) Lakhani Equipment borrows money to purchase equipment which it then leases to
customers. Lakhani must pay its loan payments on this equipment even if Lakhani’s customers
fail to pay their lease payments. Which one of the following terms best describes one of these
leases?

7)


A) Single-investor lease
B) Sale and leaseback arrangement
C) Operating lease
D) Perpetual lease
E) Straight lease