CLFP EXAM - Financial and Tax Accounting for
Leases (2025) comprehensive questions and
verified answers (detailed & elaborated) ACTUAL
EXAM 2025 TEST!!
Save
Terms in this set (138)
Consistent treatment of like transactions to allow
What is a primary goal of
clarity in presentation and consistency in
the accounting
interpretation of financial statements prepared by
profession?
various individuals or entities.
Created Opinion #5 (Reporting of Leases in Financial
Statements of Lessees) and Opinion #7 (Accounting
How did APB (Accounting
for Leases in Financial Statements for Lessors) that ha
Principals Board) fail?
different opinions and left lessors & lessees with
conflicting rules.
Financial Accounting Standards Board issued
"Accounting for Leases" which was a comprehensive
What was FASB 13?
set of standards to be followed by lessors and lessees
in accounting lease transactions.
What is Accounting Approved by FASB in 7/2009, a single source of of
Standards Codification? authoritative US accounting and reporting standards
What now governs lease ASC 840
accounting?
, a provision allowing lessee, at his option, to renew the
lease for a rental sufficiently lower than the expected
What is a Bargain Renewal
fair value of the property at the date the option
Option?
becomes excercisable. It is reasonably assured the
renewal option will be exercised.
a provision allowing lessee, at his option, to purchase
the property for a price sufficiently lower than the
What is a Bargain
expected fair market value of the property at the date
Purchase Option?
the option becomes excercisable. It is reasonably
assured the purchase option will be exercised.
Rentals that represent increases or decreases in the
lease payments made that result from changes in the
What are Contingent factors on which lease payments are based occurring
Rentals? subsequent to the inception of the lease. Increases
may occur due to increased construction cost or
indexed interest rates.
At the inception of the the lease, the estimated
remaining period during which the property is
What is Economical Useful expected to be economically usable for its intended
Life of Leased Property? purpose by one or more users. This may be impacted
by usage, technology and deterioration. Independent
of lease term.
What is Residual Value of Estimated fair value of the lease property at the end
Leased Property? of the lease.
The costs such as insurance, maintenance and taxes
incurred for the leased property, whether paid by
What is Executory Costs?
lessor or lessee. Also include costs paid by lessee as
guarantor.
The price at which the property could be sold at an
arm's length transaction by unrelated parties.
What is Value of Leased 1.) normal selling price, net volume discounts, for a
Property? lessor who manufacturer/dealer
2.) Cost, net volume discounts for a lessor that is note
a manufacturer or dealer.
Leases (2025) comprehensive questions and
verified answers (detailed & elaborated) ACTUAL
EXAM 2025 TEST!!
Save
Terms in this set (138)
Consistent treatment of like transactions to allow
What is a primary goal of
clarity in presentation and consistency in
the accounting
interpretation of financial statements prepared by
profession?
various individuals or entities.
Created Opinion #5 (Reporting of Leases in Financial
Statements of Lessees) and Opinion #7 (Accounting
How did APB (Accounting
for Leases in Financial Statements for Lessors) that ha
Principals Board) fail?
different opinions and left lessors & lessees with
conflicting rules.
Financial Accounting Standards Board issued
"Accounting for Leases" which was a comprehensive
What was FASB 13?
set of standards to be followed by lessors and lessees
in accounting lease transactions.
What is Accounting Approved by FASB in 7/2009, a single source of of
Standards Codification? authoritative US accounting and reporting standards
What now governs lease ASC 840
accounting?
, a provision allowing lessee, at his option, to renew the
lease for a rental sufficiently lower than the expected
What is a Bargain Renewal
fair value of the property at the date the option
Option?
becomes excercisable. It is reasonably assured the
renewal option will be exercised.
a provision allowing lessee, at his option, to purchase
the property for a price sufficiently lower than the
What is a Bargain
expected fair market value of the property at the date
Purchase Option?
the option becomes excercisable. It is reasonably
assured the purchase option will be exercised.
Rentals that represent increases or decreases in the
lease payments made that result from changes in the
What are Contingent factors on which lease payments are based occurring
Rentals? subsequent to the inception of the lease. Increases
may occur due to increased construction cost or
indexed interest rates.
At the inception of the the lease, the estimated
remaining period during which the property is
What is Economical Useful expected to be economically usable for its intended
Life of Leased Property? purpose by one or more users. This may be impacted
by usage, technology and deterioration. Independent
of lease term.
What is Residual Value of Estimated fair value of the lease property at the end
Leased Property? of the lease.
The costs such as insurance, maintenance and taxes
incurred for the leased property, whether paid by
What is Executory Costs?
lessor or lessee. Also include costs paid by lessee as
guarantor.
The price at which the property could be sold at an
arm's length transaction by unrelated parties.
What is Value of Leased 1.) normal selling price, net volume discounts, for a
Property? lessor who manufacturer/dealer
2.) Cost, net volume discounts for a lessor that is note
a manufacturer or dealer.
