Lease financing - class-XI
Description: lease financing | |
Number of Questions: 15 | |
Created by: Amish Majumdar | |
Tags: business capital/finance sources of business finance - 2 business studies commerce sources of business finance |
Lessor gets fixed amount of lease rental every year and they cannot increase this even if the cost of asset goes up.
Lease rentals paid by the lessee are deductible for computing taxable profits.
Match the statements in List-I with the types of lease in the List-II as follows:
List - I | List - II |
---|---|
(a) Lessor transfers all risks and rewards of an asset to the lessee. | (i) Indirect lease |
(b) Lessor transfers the assets to the lessee but bears the cost of maintenance | (ii) Operating lease |
(c) The owner of the asset sells it to turn leases it back to the owner (now lesser) | (iii) Finance lease |
(d) Lessor owns/ acquires the assets that are leased to a given lesser. | (iv) Direct lease |
The demand for leasing is steadily increasing as economic growth can be maintained even during the period of depression.
The _____ never becomes the owner of the asset.
Lease financing provides finance diluting the ownership or control of business.
The normal business operations may be affected in case the lease is not renewed.
Lease financing enables the lessee to acquire the asset with a ________ investment.
While making the leasing decision, the cost of leasing an asset must be compared with the ________.
The risk of obsolescence is borne by the _________.
The owner of the assets is called the _______ while the party that used the asset is known as the ________.
Simple documentation makes it easier to finance assets, is a ________ of lease financing.
_________ is deprived from the residual value of the asset.
The lessee pays a _________ periodic amount called lease rental to the lessor for the use of the asset.
Which of the following is a merit of lease financing?