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2024 update |CLFP - CLASS REVIEW STUDY| latest|COMPREHENSIVE QUESTIONS AND VERIFIED ANSWERS (100% Correct solutions) GET IT 100% ACCURATE!!$15.99
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1. When should lessor Within a state ...
register as foreign Good - stock of them
corp? Services offered
Inspection or repair of property
Office/employees
Negotiated contracts
2. What is dode of Ham- - 1750 BC
murabi? - Acknowledges leasing of personal property in his
code of laws
- First record of leasing law
3. Early examples of true - Phoenicians shipping experts
lease? - charters covered economic life of ships
- lessee to assume benefits and obligations of
ownership
4. What is Statue of - 1284 AD
Whales? - leasing personal property
- 1571 defined who owned the lease property
5. What is Philadelphia - 1700's railroads companies only afford tracks
Plan? - Finance from private investors for locomo-
tives/cars
- equipment trusts
- precursor of today conditional sale contract
6. When & how did Inde- - 1900's
pendent Leasing Start? - Offer short term contracts/leases
- lessor retain title
- rail cars would be returned at end
- beginning of true/operating lease
- third party leasing companies
7. What is definition of - sub of mfg. primary purpose to finance parents
captive? product
8. What is the benefit of - Sales aid
captive? - market control
- product differentiation
9. Why did lease re surge - government stimulate economy after WWII
in 1950's? - advance in technology in business equipment
- IRS 167
10. How does IRS 55-540 P - payment exceed FMV - NOT
define true lease? A - automatic titletransfer - NOT
I - interest contained in payment - NOT
N - nominal purchase option - NOT
E - equity in lease - NOT
E - excessive lease payments - NOT
11. What is different be- -FAB 13 - defines operating lease - ACCT
tween FASB 13 and IRS - IRS 55-540 - defines tax lease - TAX
55-540?
12. What is FASB 13? - 1976 Financial Accounting Standard Board
- Issued statement 13
- Set criteria by which to classify a lease capital/op-
erating
- defined treatment on financial statements
13. How does FASB 13 B - bargin purchse option - NOT
define an operating E - economic useful life > 75% - NOT
lease? A - automatic title transfer - NOT
P - PV of payments (no resid) > 90% of FMV - NOT
14. What is AMT? - Alternative Minimum Tax
- pay greater of regular tax or AMT
- limits depreciation benefit
- prompted growth in operating lease (lessee)
15. What is definition of - a transaction in which use and possession but not
Lease title to tangible property, is transferred for consid-
eration
- USE AN POSSESSION
- NOT TITLE
- TRANSFERRED FOR CONSIDERATION
, CLFP - CLASS REVIEW STUDY
16. What are the key "from - lessee vs. lessor
whose eyes" compar- - operating vs capital (accounting)
isons? - tax vs. non-tax (tax)
- true lease vs. secured transaction
17. What is ASC 840? - Accounting Standard Codification 840
- updated FASB 13
18. Key Elements of Lease - lessee must sign
Transaction? - lessor must sign
- paid invoice is transfer of ownership
- paid invoice is not transfer of title
19. What is a Finance - EFA
Agreement? - Installment Sale
- titleholder and user are the same
20. What is a single in- - tow parties
vestor lease? - lessor
- lessee
21. What is third party - three parties
lease? - lessor
- lessee
- dealer/vendor
22. What is Section 38? - IRS Section 38
- defines personal property that can be leased as
depreciable property
23. What is IRS 179? - tax deduction loaded to the front of the lease
24. What is Leveraged - non recourse
Lease? - three parties - lender, funding source. lessee
- lendor assigns rights to funding source
- tax oriented benefit to lender
- lender responsible for maintenance, insurance &
tax
- net investment declines and rises over time
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