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CLFP - CLASS REVIEW STUDY QUESTIONS
WELL ANSWERED WITH A GUARANTEED
PASS!
Question 1: When should lessor register as foreign corp?
CORRECT ANSWER : Within a state ... Good - stock of them
Services offered Inspection or repair of property Office/employees Negotiated contracts
Question 2: What is dode of Hammurabi?
CORRECT ANSWER : - 1750 BC - Acknowledges leasing of
personal property in his code of laws - First record of leasing law
Question 3: Early examples of true lease?
CORRECT ANSWER : - Phoenicians shipping experts - charters
covered economic life of ships - lessee to assume benefits and obligations of ownership
Question 4: What is Statue of Whales?
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CORRECT ANSWER : - 1284 AD - leasing personal property -
1571 defined who owned the lease property
Question 5: What is Philadelphia Plan?
CORRECT ANSWER : - 1700's railroads companies only afford
tracks - Finance from private investors for locomotives/cars - equipment trusts - precursor of today conditional sale contract
Question 6: When & how did Independent Leasing Start?
CORRECT ANSWER : - 1900's - Offer short term
contracts/leases - lessor retain title - rail cars would be returned at end - beginning of true/operating lease - third party leasing companies
Question 7: What is definition of captive?
CORRECT ANSWER : - sub of mfg. primary purpose to finance
parents product
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Question 8: What is the benefit of captive?
CORRECT ANSWER : - Sales aid - market control - product
differentiation - Increase gross margin - Ongoing customer contact
Question 9: Why did lease re surge in 1950's?
CORRECT ANSWER : - government stimulate economy after
WWII - advance in technology in business equipment - IRS 167
Question 10: How does IRS 55-540 define true lease?
CORRECT ANSWER : P - payment exceed FMV - NOT 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
Question 11: What is different between FASB 13 and IRS 55-
540?
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CORRECT ANSWER : -FAB 13 - defines operating lease -
ACCT - IRS 55-540 - defines tax lease - TAX
Question 12: What is FASB 13?
CORRECT ANSWER : - 1976 Financial Accounting Standard
Board - Issued statement 13 - Set criteria by which to classify a lease capital/operating - defined treatment on financial statements
Question 13: How does FASB 13 define an operating lease?
CORRECT ANSWER: B - bargin purchse option - NOT E -
economic useful life > 75% - NOT A - automatic title transfer - NOT P - PV of payments (no resid) > 90% of FMV - NOT