Q7. If a lessee enters into a finance lease rather than an operating lease, it can expect to have a: A) higher return on assets. B) higher debt-to-equity ratio. C) lower debt-to-equity ratio.
Q8. Which of the following statements about the impact of leases on the financial statements of the lessee is least accurate? A) Net income is lower in the early years of a finance lease than an operating lease. B) A finance lease results in higher liabilities compared to an operating lease. C) Cash flow from investing is higher for a finance lease than an operating lease.
Q9. Which of the following statements regarding the effect of a finance lease on the lessee's statement of cash flows is least accurate? A) The change in the finance lease liability on the balance sheet is a cash flow from financing. B) The interest expense portion of the lease payments reduces cash flow from operations. C) The rental expense serves to reduce the cash flow for financing because it is an investment expense.
Q10. For a given lease payment and term, which of the following is least accurate regarding the effects of the classification of the lease as a finance lease as compared to an operating lease? A) The lessee's current ratio will be higher for a finance lease. B) The lessee's asset turnover will be lower for a finance lease. C) The lessee's debt-to-equity ratio will be higher for a finance lease.
Q11. If a lease is treated as a finance lease, as compared to being treated as an operating lease, the effect on the lessee's current ratio and the debt/equity ratio will be an: Current Ratio Debt/Equity Ratio
A) Increase Increase B) Increase Decrease C) Decrease
Increase
Q12. On the lessee's cash flow statement, the principal portion of a finance lease payment is a: A) operating cash flow. B) investing cash flow. C) financing cash flow.
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发表于 2009-1-19 11:42
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