Under AASB 117 Leases,lessors Are Required to Account for Lease

question 12

Multiple Choice

Under AASB 117 Leases,lessors are required to account for lease receipts from operating leases as:

• A)revenue,on a reducing balance basis over the lease term.
• B)income,on inception date of the lease.
• C)income,on a straight-line basis over the lease term.
• D)revenue,at the end of the lease term.

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Definitions:

First-In, First-Out

An inventory valuation method where the goods first produced or acquired are sold or used first, presuming that the oldest inventory items are consumed before newer ones.

Ending Inventory

The value of goods available for sale at the end of an accounting period, after purchases and sales have been accounted for.

Average Cost Formulas

A method used in accounting to calculate the cost of goods sold and ending inventory by averaging the cost of all items available for sale during the period.

Unit Cost

The expense incurred to produce, store, and sell one unit of a product or service.