While only certain leases are currently accounted for as a sale or purchase, there is theoretic justification for considering all leases

While only certain leases are currently accounted for as a sale or purchase, there is theoretic justification for considering all leases to be sales or purchases. The principal reason that supports this idea is that

a. all leases are generally for the economic life of the property and the residual value of the property at the end of the lease is minimal.
b. at the end of the lease the property usually can be purchased by the lessee.
c. a lease reflects the purchase or sale of a quantifiable right to the use of property.
d. during the life of the lease the lessee can effectively treat the property as if it were owned.


Answer: a lease reflects the purchase or sale of a quantifiable right to the use of property

Major reasons why a company may become involved in leasing to other companies is (are)

a. interest revenue.
b. high residual values.
c. tax incentives.
d. All of these answers are correct.


Answer: All of these answers are correct

The main purpose of the Pension Benefit Guaranty Corporation is to

a. require minimum funding of pensions.
b. require plan administrators to publish a comprehensive description and summary of their plans.
c. administer terminated plans and to impose liens on the employer's assets for certain unfunded pension liabilities.
d. All of these answers are correct.


Answer: administer terminated plans and to impose liens on the employer's assets for certain unfunded pension liabilities