One simulation question I had was about going over BOD minutes after year end. The client had a customer that went bankrupt and had to write off their accounts receivable. This topic didn't come up in my Becker AUD review and on the exam I answered
DR Bad Debt Exp
CR Accounts Receivable
However, after studying for FAR and going over the material I feel like the answer should have been.
DR Allowance for Doubtful Accounts
CR Accounts Receivable?
The present value of the lease asset and liability are the same, so as the cash is paid to rent expense, there needs to be the lease asset reduction. This nets with the lease liability reduction (because it is operating and not based on interest). Shouldnt expense be grossed up by the reduction of the lease asset?