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[The following information applies to the questions displayed below.] We report all cash flows as operating cash flows, except the principal portion of each payment in a finance lease, which is a cash flow from financing activities. Extensive disclosure requirements for lessees and lessors are designed to enable users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. Knowledge Check 01 Which of the following statements about the impact of leases on the statement of cash flows are true? Note: Select all that apply.

Contract liability, deferred revenue and unearned revenue are all ways to describe a liability that the seller recognizes with respect to unsatisfied performance obligations for which the seller has already been paid.

[The following information applies to the questions displayed below.] The lease term is the contractual lease term modified by any renewal or termination options that are reasonably certain to be exercised or not exercised. Options whose exercise is under the control of the lessor are automatically included. Lease payments include payments resulting from those options as well as excess guaranteed residual values. The calculation of the present value of lease payments at the beginning of the lease does not include any variable lease payments, unless those payments are “in-substance fixed payments” or if they are based solely on an index or rate. Knowledge Check 01 If the option is reasonably certain to be exercised, how does the inclusion of a provision that gives the lessee the option to purchase the lease asset during the lease term at a specified exercise price impact that accounting for that lease? Note: Select all that apply.

__________is toxic to plants and causes acid rain.

If a seller makes payments to a customer to purchase goods or services, and those payments are equal to the stand-alone selling prices of those goods or services, part of those payments are a refund to the customer.

[The following information applies to the questions displayed below.] Accounting for leases is similar in most respects under U.S. GAAP or IFRS. The primary difference is that IFRS treats all leases as finance leases by the lessee. Knowledge Check 01 Which of the following statements about the classification and accounting for leases are true? Note: Select all that apply.

[The following information applies to the questions displayed below.] 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 Amortization of a right-of-use asset over the lease term is recorded by the:

Which of the following nutrients does not have a gaseous phase?

The residual approach to estimate stand-alone selling prices is often used for goods or services that are sold separately and that have stable prices.

[The following information applies to the questions displayed below.] In an operating lease, a sale is not recorded by the lessor. Instead, the periodic lease payments are accounted for as rent revenue by the lessor. The lessee records a right-of-use asset and lease liability at the present value of the lease payments. Interest expense is recognized at the effective rate times the outstanding balance. Amortization of the right-of-use asset is determined as the amount needed to cause the total lease expense (interest plus amortization) to be a straight-line amount equal to the lease payment. Knowledge Check 01 Under an operating lease: Note: Select all that apply.