eral years concerning the ownership of a small parcel of land. T
he representative of the Railroad has offered to assign any rights
which the Railroad may have in the land to Ward in exchange f
or a release of his right to reimbursement for the loss he has sust
ained from the fire. Ward appears inclined to accept the Railroa
d’s offer. The Railroad’s 2007 financial statements should inclu
de the following related to the incident:
51) Which of the following contingencies need NOT be disclose
d in the financial statements or the notes thereto?
52) The covenants and other terms of the agreement between the
issuer of bonds and the lender are set forth in the
53) If bonds are issued initially at a premium and the effectiveinterest method of amortization is used, interest expense in the e
arlier years will be
54) Bonds that pay no interest unless the issuing company is pro
fitable are called
55) Minimum lease payments may include a
56) An essential element of a lease conveyance is that the
57) While only certain leases are currently accounted for as a sal
e or purchase, there is theoretic justification for considering all l
eases to be sales or purchases. The principal reason that supports
this idea is that
58) In the earlier years of a lease, from the lessee’s perspective, t
he use of the
59) In a lease that is appropriately recorded as a directfinancing lease by the lessor, unearned income
60) In order to properly record a directfinancing lease, the lessor needs to know how to calculate the le
ase receivable. The lease receivable in a directfinancing lease is best defined as
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ACC 422 Final Exam Guide 3
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