Leases and Contracts

FAR — Financial Accounting and Reporting · 5 questions

Key Takeaways

Covers lessee and lessor accounting under ASC 842.
Tests the classification rules that determine whether a lease is operating or finance.

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Question 1Easy

Under ASC 842, what is the primary criterion used to determine whether a contract contains a lease?

A.The contract conveys the right to control the use of an identified asset for a period of time in exchange for considerationB.The contract involves the transfer of title to an asset at the end of the arrangementC.The contract is between a lessor and lessee with a minimum lease term of one yearD.The contract requires the lessee to maintain and insure the leased asset

Select an answer and check it