Exam 2

Question 1

What table do you use for the problem if payment is made on the first day of the month

Answer 1

Present Value of an Annuity Due

Question 2

What is the formula for payments

Answer 2

FMV or PV /PVofAD Factor

Question 3

Does Lessor use implicit or actual borrowing rate

Answer 3

The lessor uses the implicit rate

Question 4

When an expense goes up ______ Goes down

Answer 4

Stockholder’s Equity

Question 5

In an operating Lease, what is the journal entry to the lessor

Answer 5

Cash Dr

Rent Revenue Cr

Question 6

In an operating Lease, what is the journal entry to the lessee

Answer 6

Rent Expense Dr

Cash Cr

Question 7

When looking at the question Darla Likes to change the date, what is the result

Answer 7

This causes a partial year or partial payment to occur

Question 8

Prepaid Rent is Deducted for Income Tax Purposes This results in a ________

Answer 8

Deferred Tax Liability

Question 9

According to GAAP when accounting for a Operating Loss Carry forward a ______ is created

Answer 9

Defered Tax Equity Account including any valuation allowance

Question 10

Accrued Warrany Expense creates a ______

Answer 10

Deferred Tax Asset

Question 11

Deferred Tax Assets are______

Answer 11

Income Tax Benefits