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  3. 1. lessors are required to account for lease recei

1. Lessors are required to account for lease receipts from operation leases as a. Revenue,...

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Accounting

1. Lessors are required to account for lease receipts from operation leases as a. Revenue, at the end of the lease term b. Income, on inception date of the lease c. Income, on a straight-line basis over the lease term d. Revenue, on a reducing balance basis over the lease term 2. Customer X enters into a five-year contract with Supplier Y for the right to transport oil from Country A to Country B through Supplier Y's pipeline. The contract provides that Customer X will have the right to use 60% of the pipeline's capacity throughout the term of the arrangement. Is the portion of the pipeline specified in the contract qualifies as an identified asset for purposes of lease accounting? a. Yes, because it is physically distinct. b. Yes, because it represents substantially all of the capacity of the entire pipeline. c. No, because it is not physically distinct and it does not represent substantially all of the capacity of the entire pipeline. d. No, but I don't know why. 3. Which of the following statements is correct regarding the accounting for leases? a. The lessor depreciates the leased asset under a finance lease. b. The lessee depreciates the

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