FAR 4

Question 1

Any criteria that only one needs to be met to be a finance lease?

Answer 1

Ownership
Written option
Net present value of pymts exceeds fair value
Economic life; major part
Specialized

Question 2

How to calculate loan origination fee?

Answer 2

Loan origination fees shall be deferred and recognized over the life of the loan.

Question 3

How are cost associated with bond issuance processed?

Answer 3

Costs associated with issuance of a bond should be amortized over the term of the bond.

Question 4

Why are variable leases payments impacted negatively?

Answer 4

Variable lease payments are treated as cash outflows.

Question 5

What is a bond sinking fund?

Answer 5

A fund that a company contributes cash each period.

Question 6

Which PTO is included in accrued Compensated pay?

Answer 6

Accrued Compensated absences generally includes vacay pay not sick pay.

Question 7

If Note Rec was acquired in July 1, how much of the discount rate is calculated in the first year?

Answer 7

6/12 = 1/2

Question 8

Is a cost of issuing a bond expensed or amortized?

Answer 8

Discount as well as cost of issuing a bond are amortized.

Question 9

How to calculate interest expense on a lease?

Answer 9

Find the PV of Ord Annuity for the remainder of the years of the interest rate on a lease, multiply that figure to the annual lease payment and multiply that result to interest rate to get the current year interest expense.