A Material Item Which Is Unusual in Nature or Infrequent

question 50

Short Answer

A material item which is unusual in nature or infrequent in occurrence, but not both should be shown in the income statement $\begin{array}{cc}&\text { Net of Tax } & \text { Disclosed Separately } \\\hline a.&\text { No } & \text { No } \\b.&\text { Yes } & \text { Yes } \\c.&\text { No } & \text { Yes } \\d.&\text { Yes } & \text { No }\end{array}$

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Definitions:

Lease Expense

The cost incurred from leasing an asset, including both fixed payments and variable charges over the lease term.

Leveraged Lease

A lease agreement that involves a lessor financing the leased asset through borrowing, with the lease payments covering the loan repayments and providing profit.

Direct Financing Lease

A lease agreement where the lessor records the present value of lease payments as a receivable rather than as a sale or lease revenue.

Lessor

The party in a lease agreement that owns the leased asset and grants the lessee the right to use the asset in exchange for lease payments.