When a lease is classified as a finance lease from the lessee’s perspective and a sales-type lease from the lessor’s perspective, (1) the lessee records a right-of-use asset and lease liability for the present value of the lease payments, and (2) the lessor records a lease receivable for the same amount and removes the asset from its books. The lessor recognizes interest revenue and the lessee recognizes interest expense at the effective rate times the outstanding balance. The lessee amortizes the right-of-use asset on a straight line basis. For an operating lease, the two components, interest and amortization, are shown as one lease expense in the income statement. Knowledge Check 01 Assume that a lessor applies the five criteria to a lease involving equipment and determines that a lease should be classified as a sales-type lease. The entry the lessor will record at the beginning of the lease will include a:

Scenario: Young adults who identify as LGBTQ often report lower levels of family support and often live on their own in their late teens instead of in the family home. They report high levels of isolation and even harassment.  Which suggested protective factor fits best? 

If the lease begins “at or near the end” of an asset’s economic life, the criterion of the lease term being for the major part of the economic life should not be applied when classifying the type of lease. This is consistent with the basic premise of this criterion that most of the risks and rewards of ownership occur prior to that time.

Carbon dioxide concentrations fluctuate seasonally on the surface of the planet largely as a result of

When individuals within an organization do things right and do the right things, they are said to be acting

Eyelids should __________ and not ___________.

A company wants to categorize customers into segments such as “bargain hunters,” “status seekers,” and “loyal enthusiasts.” These labels help classify people but do not imply order or quantity. Which level of measurement is appropriate here?

The same revenue recognition requirements always apply to franchise arrangements that apply to other selling arrangements.

Stayman Associates has sold a good to a buyer and wants to recognize revenue. Which of the following is an indicator that control of a good has passed from Stayman to the buyer?

When revenue is recognized over time versus upon completion of the contract, different amounts of total profit or loss are recognized for a particular contract.