Practice: Lease Accounting Quiz Quiz | Financial Accounting & Reporting (FAR)

Question 1

Under U.S. GAAP (ASC 842), a lease is best defined as:

Answer

A contract that transfers legal ownership of an asset

Answer

A contract that conveys the right to control the use of an identified asset for a period of time in exchange for consideration

Answer

Any agreement involving rental payments

Answer

A financing arrangement involving only real estate

Question 2

Who is the lessee in a lease agreement?

Answer

The party obtaining the right to use the asset

Answer

The owner of the leased asset

Answer

The lender providing financing

Answer

The guarantor of lease payments

Question 3

Who is the lessor in a lease agreement?

Answer

The borrower

Answer

The customer using the asset

Answer

The party granting the right to use the asset

Answer

The insurance provider

Practice Quiz