CA Intermediate Paper 1

AS 19 - Leases MCQ

Chapter 15 • 5 Questions from ICAI Study Material

Questions

5

Est. Time

8 min

Source

ICAI Book

Sample Questions: AS 19 - Leases

Preview 3 of 5 questions from Chapter 15

1. A Ltd. sold machinery having WDV of ₹ 40 lakhs to B Ltd. for ₹ 50 lakhs (Fair value ₹ 50 lakhs) and same machinery was leased back by B Ltd. to A Ltd. The lease back is in nature of operating lease. The treatment will be

A) A Ltd. should amortise the profit of ₹ 10 lakhs over lease term.
B) A Ltd. should recognise the profit of ₹ 10 lakhs immediately. ✓
C) A Ltd. should defer the profit of ₹ 10 lakhs.
D) B Ltd. should recognise the profit of ₹ 10 lakhs immediately.

2. In case of an operating lease – identify which statement is correct:

A) The lessor continues to show the leased asset in its books of accounts. ✓
B) The lessor de-recognises the asset from its Balance Sheet.
C) The lessor discontinues to claim depreciation in its books.
D) The lessee recognises the asset in its Balance Sheet.

3. In case of finance lease, if the asset is returned back to the lessor at the end of the lease term - the lessee always claims depreciation based on which of the following:

A) Useful life.
B) Lease term.
C) Useful life or lease term whichever is less. ✓
D) Useful life or lease term whichever is higher.