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.

答案和详解如下：

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.

Correct answer is B)         

Leasing the asset with an operating lease avoids recognition of the debt on the lessee’s balance sheet. Having fewer assets and liabilities on the balance sheet than would exist if the assets were purchased increases profitability ratios (e.g., return on assets) and decreases leverage ratios (e.g., debt-to-equity ratio). In the case of a finance lease, the assets are reported on the balance sheet and are depreciated.

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.

Correct answer is C)         

Cash flow from investing is not affected by a lease being either a finance or an operating lease. Finance leases reduce cash flow from operations by only the portion of the lease payment attributed to interest expense. Cash flow from financing is reduced by the rest of the finance lease payment which is the principal part of the payment.

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.

Correct answer is C)         

In finance leases, there is only interest expense and principal repayment. Rental expense is only charged when the lease is an operating lease.

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.

Correct answer is A)

The lessee's current ratio will be lower because the current portion of the finance lease increases current liabilities, hence reducing the current ratio.

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

Correct answer is C)

With finance leases the lessee's assets, current liabilities, and long-term liabilities will be greater than if the lease was an operating lease. With the debt to equity ratio, the liability is in the numerator, which results in an increase in the ratio. With the current ratio, current liabilities are increased and are in the denominator which results in a decrease in the ratio.

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.

Correct answer is C)

The principal portion of a finance lease payment is a financing cash outflow for the lessee. The interest portion is an operating cash outflow.

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正解