{"id":45835,"date":"2024-04-15T22:03:43","date_gmt":"2024-04-15T22:03:43","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=45835"},"modified":"2024-04-15T22:03:43","modified_gmt":"2024-04-15T22:03:43","slug":"which-of-the-following-statements-is-are-true-i-tax-shield-on-depreciation-and-interest-is-an-important-variable-both-for-the-lessor-and-the-lessee-ii-lease-transactions-in-india-are-governed-by-t","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/which-of-the-following-statements-is-are-true-i-tax-shield-on-depreciation-and-interest-is-an-important-variable-both-for-the-lessor-and-the-lessee-ii-lease-transactions-in-india-are-governed-by-t\/","title":{"rendered":"Which of the following statements is\/are true? i. Tax-shield on depreciation and interest is an important variable both for the lessor and the lessee. ii. Lease transactions in India are governed by the Lease Act. iii. A lessee should evaluate the lease options against the buying option. iv. As per AS-19, financial lease is shown in the balance sheet of the lessee as an asset."},"content":{"rendered":"<p>\r\n    <!-- Check if it's an AMP page -->\r\n            <!-- Non-AMP version -->\r\n        <div class=\"mcq-container\" data-quiz-id=\"quizState_6a9781287ea99\">\r\n                                            <div class=\"option\" data-option-key=\"option1\" data-is-correct=\"true\">\r\n                    i and iv                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option2\" data-is-correct=\"false\">\r\n                    i, iii and iv                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option3\" data-is-correct=\"false\">\r\n                    ii, iii and iv                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option4\" data-is-correct=\"false\">\r\n                    Only ii                <\/div>\r\n                            \r\n            <!-- Feedback messages for non-AMP -->\r\n            <div class=\"feedback\" data-feedback=\"wrong\">Answer is Right!<\/div>\r\n            <div class=\"feedback\" data-feedback=\"right\">Answer is Wrong!<\/div>\r\n        <\/div>\r\n\r\n        <script>\r\n        document.addEventListener('DOMContentLoaded', function () {\r\n            var containers = document.querySelectorAll('.mcq-container');\r\n\r\n            containers.forEach(function(container) {\r\n                var options = container.querySelectorAll('.option');\r\n                var feedbackSelect = container.querySelector('[data-feedback=\"select\"]');\r\n                var feedbackWrong = container.querySelector('[data-feedback=\"wrong\"]');\r\n                var feedbackRight = container.querySelector('[data-feedback=\"right\"]');\r\n\r\n                options.forEach(function(option) {\r\n                    option.addEventListener('click', function() {\r\n                        var selectedOption = option.getAttribute('data-option-key');\r\n                        var isCorrect = option.getAttribute('data-is-correct') === 'true';\r\n\r\n                        \/\/ Remove previous selections\r\n                        options.forEach(function(opt) {\r\n                            opt.classList.remove('correct', 'incorrect');\r\n                        });\r\n\r\n                        \/\/ Add the correct\/incorrect class\r\n                        if (isCorrect) {\r\n                            option.classList.add('correct');\r\n                            feedbackRight.hidden = false;\r\n                            feedbackWrong.hidden = true;\r\n                        } else {\r\n                            option.classList.add('incorrect');\r\n                            feedbackRight.hidden = true;\r\n                            feedbackWrong.hidden = false;\r\n                        }\r\n\r\n                        \/\/ Hide select feedback\r\n                        feedbackSelect.hidden = true;\r\n                    });\r\n                });\r\n            });\r\n        });\r\n        <\/script>\r\n    \r\n    <!--more--><\/p>\n<p>The correct answer is: A. i and iv<\/p>\n<p>Statement i is true because tax-shield on depreciation and interest is <div class=\"youtube-subscribe-container\">\r\n        <a href=\"https:\/\/www.youtube.com\/channel\/UCNHT8lW-JmLC68rjBfZhdkg?sub_confirmation=1\" target=\"_blank\" class=\"youtube-subscribe-button\">\r\n            <span class=\"youtube-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 576 512\">\r\n        <div class=\"telegram-channel-container\">\r\n        <a href=\"https:\/\/t.me\/pscnotes2025\" target=\"_blank\" class=\"telegram-channel-button\">\r\n            <span class=\"telegram-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 496 512\">\r\n                    <path fill=\"white\" d=\"M248,8C111,8,0,119,0,256s111,248,248,248s248-111,248-248S385,8,248,8z M362,177L320,367c-3,14-10,18-20,14l-56-41l-27,26 c-3,3-5,5-10,5l4-63L323,196c5-5-1-7-8-3l-98,62l-42-13c-9-3-10-9,2-14l162-63C351,160,365,164,362,177z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n            Join Our Telegram Channel\r\n        <\/a>\r\n    <\/div>             <path d=\"M549.7 124.1c-6.3-23.7-24.8-42.3-48.3-48.6C458.8 64 288 64 288 64S117.2 64 74.6 75.5c-23.5 6.3-42 24.9-48.3 48.6-11.4 42.9-11.4 132.3-11.4 132.3s0 89.4 11.4 132.3c6.3 23.7 24.8 41.5 48.3 47.8C117.2 448 288 448 288 448s170.8 0 213.4-11.5c23.5-6.3 42-24.2 48.3-47.8 11.4-42.9 11.4-132.3 11.4-132.3s0-89.4-11.4-132.3zm-317.5 213.5V175.2l142.7 81.2-142.7 81.2z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n            Subscribe on YouTube\r\n        <\/a>\r\n    <\/div> an important variable both for the lessor and the lessee. The lessor can claim depreciation on the leased asset, which reduces its taxable income. The lessee can claim interest expense on the lease, which reduces its taxable income.<\/p>\n<p>Statement ii is false because lease transactions in India are governed by the Indian Contract Act, 1872.<\/p>\n<p>Statement iii is true because a lessee should evaluate the lease options against the buying option to determine which option is more beneficial.<\/p>\n<p>Statement iv is true because as per AS-19, financial lease is shown in the balance sheet of the lessee as an asset.<\/p>\n<p>Here is a brief explanation of each option:<\/p>\n<ul>\n<li>Option i: Tax-shield on depreciation and interest is an important variable both for the lessor and the lessee. The lessor can claim depreciation on the leased asset, which reduces its taxable income. The lessee can claim interest expense on the lease, which reduces its taxable income.<\/li>\n<li>Option ii: Lease transactions in India are governed by the Lease Act. This is false because lease transactions in India are governed by the Indian Contract Act, 1872.<\/li>\n<li>Option iii: A lessee should evaluate the lease options against the buying option. This is true because a lessee should evaluate the lease options against the buying option to determine which option is more beneficial.<\/li>\n<li>Option iv: As per AS-19, financial lease is shown in the balance sheet of the lessee as an asset. This is true because as per AS-19, financial lease is shown in the balance sheet of the lessee as an asset.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Subscribe on YouTube<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[85],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Which of the following statements is\/are true? i. Tax-shield on depreciation and interest is an important variable both for the lessor and the lessee. ii. Lease transactions in India are governed by the Lease Act. iii. A lessee should evaluate the lease options against the buying option. iv. 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