CLFP-CLASS REVIEW STUDY GUIDE 2023-2024 ACTUAL EXAM TEST BANK 200 QUESTIONS AND CORRECT
DETAILED ANSWERS
When should lessor register as foreign corp? - (answer) Within a state ...
Good - stock of them
Services offered
Inspection or repair of property
Office/employees
Negotiated contracts
What is dode of Hammurabi? - (answer) - 1750 BC
- Acknowledges leasing of personal property in his code of laws
- First record of leasing law
Early examples of true lease? - (answer) - Phoenicians shipping experts
- charters covered economic life of ships
- lessee to assume benefits and obligations of ownership
What is Statue of Whales? - (answer) - 1284 AD
- leasing personal property
- 1571 defined who owned the lease property
What is Philadelphia Plan? - (answer) - 1700's railroads companies only afford tracks
- Finance from private investors for locomotives/cars
- equipment trusts
- precursor of today conditional sale contract
When & how did Independent Leasing Start? - (answer) - 1900's
- Offer short term contracts/leases
- lessor retain title
,CLFP-CLASS REVIEW STUDY GUIDE 2023-2024 ACTUAL EXAM TEST BANK 200 QUESTIONS AND CORRECT
DETAILED ANSWERS
- rail cars would be returned at end
- beginning of true/operating lease
- third party leasing companies
What is definition of captive? - (answer) - sub of mfg. primary purpose to finance parents product
What is the benefit of captive? - (answer) - Sales aid
- market control
- product differentiation
- Increase gross margin
- Ongoing customer contact
Why did lease re surge in 1950's? - (answer) - government stimulate economy after WWII
- advance in technology in business equipment
- IRS 167
How does IRS 55-540 define true lease? - (answer) P - payment exceed FMV - NOT
A - automatic titletransfer - NOT
I - interest contained in payment - NOT
N - nominal purchase option - NOT
E - equity in lease - NOT
E - excessive lease payments - NOT
What is different between FASB 13 and IRS 55-540? - (answer) -FAB 13 - defines operating lease - ACCT
- IRS 55-540 - defines tax lease - TAX
What is FASB 13? - (answer) - 1976 Financial Accounting Standard Board
, CLFP-CLASS REVIEW STUDY GUIDE 2023-2024 ACTUAL EXAM TEST BANK 200 QUESTIONS AND CORRECT
DETAILED ANSWERS
- Issued statement 13
- Set criteria by which to classify a lease capital/operating
- defined treatment on financial statements
How does FASB 13 define an operating lease? - (answer) B - bargin purchse option - NOT
E - economic useful life > 75% - NOT
A - automatic title transfer - NOT
P - PV of payments (no resid) > 90% of FMV - NOT
What is AMT? - (answer) - Alternative Minimum Tax
- pay greater of regular tax or AMT
- limits depreciation benefit
- prompted growth in operating lease (lessee)
What is definition of Lease - (answer) - a transaction in which use and possession but not title to
tangible property, is transferred for consideration
- USE AN POSSESSION
- NOT TITLE
- TRANSFERRED FOR CONSIDERATION
What are the key "from whose eyes" comparisons? - (answer) - lessee vs. lessor
- operating vs capital (accounting)
- tax vs. non-tax (tax)
- true lease vs. secured transaction
What is ASC 840? - (answer) - Accounting Standard Codification 840
- updated FASB 13
DETAILED ANSWERS
When should lessor register as foreign corp? - (answer) Within a state ...
Good - stock of them
Services offered
Inspection or repair of property
Office/employees
Negotiated contracts
What is dode of Hammurabi? - (answer) - 1750 BC
- Acknowledges leasing of personal property in his code of laws
- First record of leasing law
Early examples of true lease? - (answer) - Phoenicians shipping experts
- charters covered economic life of ships
- lessee to assume benefits and obligations of ownership
What is Statue of Whales? - (answer) - 1284 AD
- leasing personal property
- 1571 defined who owned the lease property
What is Philadelphia Plan? - (answer) - 1700's railroads companies only afford tracks
- Finance from private investors for locomotives/cars
- equipment trusts
- precursor of today conditional sale contract
When & how did Independent Leasing Start? - (answer) - 1900's
- Offer short term contracts/leases
- lessor retain title
,CLFP-CLASS REVIEW STUDY GUIDE 2023-2024 ACTUAL EXAM TEST BANK 200 QUESTIONS AND CORRECT
DETAILED ANSWERS
- rail cars would be returned at end
- beginning of true/operating lease
- third party leasing companies
What is definition of captive? - (answer) - sub of mfg. primary purpose to finance parents product
What is the benefit of captive? - (answer) - Sales aid
- market control
- product differentiation
- Increase gross margin
- Ongoing customer contact
Why did lease re surge in 1950's? - (answer) - government stimulate economy after WWII
- advance in technology in business equipment
- IRS 167
How does IRS 55-540 define true lease? - (answer) P - payment exceed FMV - NOT
A - automatic titletransfer - NOT
I - interest contained in payment - NOT
N - nominal purchase option - NOT
E - equity in lease - NOT
E - excessive lease payments - NOT
What is different between FASB 13 and IRS 55-540? - (answer) -FAB 13 - defines operating lease - ACCT
- IRS 55-540 - defines tax lease - TAX
What is FASB 13? - (answer) - 1976 Financial Accounting Standard Board
, CLFP-CLASS REVIEW STUDY GUIDE 2023-2024 ACTUAL EXAM TEST BANK 200 QUESTIONS AND CORRECT
DETAILED ANSWERS
- Issued statement 13
- Set criteria by which to classify a lease capital/operating
- defined treatment on financial statements
How does FASB 13 define an operating lease? - (answer) B - bargin purchse option - NOT
E - economic useful life > 75% - NOT
A - automatic title transfer - NOT
P - PV of payments (no resid) > 90% of FMV - NOT
What is AMT? - (answer) - Alternative Minimum Tax
- pay greater of regular tax or AMT
- limits depreciation benefit
- prompted growth in operating lease (lessee)
What is definition of Lease - (answer) - a transaction in which use and possession but not title to
tangible property, is transferred for consideration
- USE AN POSSESSION
- NOT TITLE
- TRANSFERRED FOR CONSIDERATION
What are the key "from whose eyes" comparisons? - (answer) - lessee vs. lessor
- operating vs capital (accounting)
- tax vs. non-tax (tax)
- true lease vs. secured transaction
What is ASC 840? - (answer) - Accounting Standard Codification 840
- updated FASB 13
