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BOMI- BUDGETING AND ACCOUNTING
FINAL EXAM 2025 WITH ACCURATELY
SOLVED ANSWERS
What is rent roll? - CORRECT_ANSWER_It is a quick reference of an entire property that contains information about each tenant.
What is a vacancy report? - CORRECT_ANSWER_It is a summary of all of a properties vacancies
What is a delinquency report? - CORRECT_ANSWER_A monthly summary of overdue payments, actions taken to collect, and other information,
What is a tickler system? - CORRECT_ANSWER_A method used to remind the user of key dates and deadlines.
What is an audit trailer - CORRECT_ANSWER_A record of every financial transaction associated with a property.
Records convert raw data into a:
a) report to be be reviewed by management
b) permanent form for later reference and retrieval
c) statistical chart
d) readable format - CORRECT_ANSWER_b) Permanent form for later reference and retrieval
(Fill in the blank) Property and facility managers should have a (an)_________ system to remind them of key deadlines and filing dates.
a) management
b) audit trail
c) delinquency
d) tickler - CORRECT_ANSWER_d) tickler
All of the following are considered accounts payable except:
a) vendor payments
b) supplier payments
Define Revenue Cycle. - CORRECT_ANSWER_The functions required to exchange products or services with customers for cash.
Define Expenditure Cycle. - CORRECT_ANSWER_Those functions that require property, goods, services, and labor; pay for them; and classify, summarize, and report what is acquired and what is paid for.
What is an Account? - CORRECT_ANSWER_An individual records of information and transactions related to each asset or liability and to each aspect of owners equity.
What are transactions? - CORRECT_ANSWER_They are financial events that are recognized within a financial statement or report.
What is the goal of the accountant during the holding period of the property? - CORRECT_ANSWER_To deliver accurate, meaningful and timely financial reports to the decision makers managing the property.
What is the goal of the property or facility manager during the holding period of the property? - CORRECT_ANSWER_It is to enhance the value of the property, thus providing a profit potential upon final sale.
How do the property and facility managers use periodic financial reports? - CORRECT_ANSWER_To plan facilities budgets and make business decisions to best enhance the needs of the building occupants, market forces, and the objective of enhancing value.
Greg of enterprising properties to consider that when they identify an expenditure as a capital item, the expenditure ....blank.... be included in the escalatable cost pool. As such , tenants ...Blank... be charged for the costs incurred through the payment of capital items - CORRECT_ANSWER_cannot , cannot
in keeping with generally accepted practice, and unless otherwise stated. Greg correctly insists that rent and other charges to tenants begin , when? - CORRECT_ANSWER_upon occupancy, and not on the first day of the month unless occupancy is the first day of the month
what ratios are often used to determine earning power of a company - CORRECT_ANSWER_return on equity
earnings per share
common size comparative statements
if a general ledger is prepared correctly , cash disbursements are transferred to expense accounts as a ...? - CORRECT_ANSWER_Debit
and total disbursements are transferred to the cash account as a ......? - CORRECT_ANSWER_credit
debt service ratio is? - CORRECT_ANSWER_the number of times debt can be paid from income
Which key components make up the bookkeeping process? (2) - CORRECT_ANSWER_recording and classifying transactions is known as bookkeeping.
Describe the roles filled by a accountant (3) - CORRECT_ANSWER_Accounting is a system of summarizing, interpreting, and communicating financial data.
What are the primary functions associated with accounting? (4) - CORRECT_ANSWER_Accounting is the next step in the process. Accounting is the system of summarizing, interpreting, and communicating financial data.
Specify functions incorporated in the budgeting process. (4) - CORRECT_ANSWER_Budgeting is the ongoing process of coordinating resources and expenditures. Through this process, a plan is created with research and data as the foundation.
The budget reflects the priorities of the business and the resources needed to accomplish them. - CORRECT_ANSWER_
Describe the accounting cycle types most common to commercial real estate management business (5) - CORRECT_ANSWER_revenue cycle and the expenditure cycle
what are the generally accepted accounting principles? (GAAP) (19) - CORRECT_ANSWER_Generally accepted accounting principles (GAAP) are a common set of accounting principles, standards, and procedures that companies use to record accounting data and compile their financial statements.
GAAP is a combination of authoritative standards (set by policy boards), as well as commonly accepted ways of recording and reporting accounting information. - CORRECT_ANSWER_These standards are codified by the Financial Accounting Standards Board (FASB).
What are international accounting standards ?(19) - CORRECT_ANSWER_Standards established and maintained by the International Accounting Standards Board, that are used by multi national companies
What are internal reporting needs common to the real property industry?(20) - CORRECT_ANSWER_property industry internal reporting includes , tenant collections, vendor payments, and monthly operating results.
Describe standard financial statements that businesses use? (20) - CORRECT_ANSWER_These financial statements consist of an income statements, a balance sheet, and a statement of cash flows.The income statement shows
revenues earned and expenses incurred in earning those revenues, resulting in net income or net loss for the period.
What are common accounting methods used for recording financial transactions? (21) - CORRECT_ANSWER_Accounting and financial reports can be prepared on a cash, accrual, or modified accrual (also known as hybrid) accounting basis.
When the cash method is used, income and expenses are recorded only when they are received or paid out. This form of accounting is the most basic and has a cote focus on the actual timing of both cash received and cash dispersed. - CORRECT_ANSWER_
Explain accounting control strategies as they are used in real estate. (22) - CORRECT_ANSWER_control strategies place to detect fraud or theft but are primarily put in place to avoid human error. strategies to avoid missed cash collection, or conversely excessive outflows that deplete an owners cash. These include, collections, costs controls
Scenario - Chapter 1. Harold, an experienced finances manager for Beach Properties, hired Janet and is reviewing the various aspects of budgeting and accounting that she will need to understand and perform. - CORRECT_ANSWER_Although she majored in finance at the local college, she
b. identify
c. interpret
d. record - CORRECT_ANSWER_c. interpret
remember Janet, that when we create our budget, we make a plan for the financing expenditures in the ...Blank..., says Harold - CORRECT_ANSWER_d. next year
At lunch, Janet tells a friend that some of the job functions she will be performing include acquiring property, paying for it, and reporting on what is acquired and paid for. "Oh," her friend correctly notes, "then you'll be involved in the....BLANK..cycle of accounting."
a. asset
b. control
c. revenue
d. expenditure - CORRECT_ANSWER_d. expenditure
When Janet "balances the books" (or the summary accounts), she will basically be dealing with:
a. assets, liabilities, and owner's equity.
b. tax planning, revenues, and liabilities.
c. liabilities, budgets, and owner's equity.
d. owner's equity, capital, and tax planning. - CORRECT_ANSWER_a. assets, liabilities, and owner's equity
Janet," asks Harold, "if the company takes out a loan to make capital purchases, how would you record this?" To be correct, Janet should record the money received as a________in Assets and as a__ in Liabilities.
a. debit; debit
b. debit; credit
c. credit; debit
d. credit; credit - CORRECT_ANSWER_b. debit; credit
Day after day, Janet records debits and credits for each entry to the balance sheet. This pro-
cess is referred to as accounting.
a. single-pass
b. double-pass
c. single-entry
d. double-entry - CORRECT_ANSWER_d. double-entry
c. monthly
d. yearly - CORRECT_ANSWER_c. monthly
Janet, if I want to know what monies have been earned, but not yet received, by the company, what standard financial statement would I consult?" Janet responds quickly and
accurately, "You would want to examine the statement."
a. income
b. cash flow
c. accounts payable
d. accounts receivable - CORRECT_ANSWER_d. accounts receivable
For now, Harold has Janet prepare financial reports on a(n) basis, as it is the most basic method.
a. accrual
b. cash
c. modified accrual
d. modified cash - CORRECT_ANSWER_b. cash
Harold will soon be introducing Janet to accounting, or internal, controls that maximize cash income and minimize cash outflows. In particular, she will have to learn how to help the company avoid the most common error in properly administering tenant leases, which is: - CORRECT_ANSWER_a. offering lease rates at below-market value.
b. not using smartphone apps for lease payments.
c. overlooking charges that are properly billable to the tenant.
d. delaying the filing of annual forms with the proper governmental authorities.
c. overlooking charges that are properly billable to the tenant. - CORRECT_ANSWER_
Chapter 2 - CORRECT_ANSWER_Chapter 2
In what practical ways do building professionals use records? ( 2-3_) - CORRECT_ANSWER_accurate data is what allows stakeholders to take raw data and convert it into useful information from which final decisions can be made. these records are required for compliance with tax and legal requirements
Explain the practice of checks and balances. (4) - CORRECT_ANSWER_procedures put in place to ensure to different individuals perform different roles and
which elements are typically tracked with the use of a tickler system (14) - CORRECT_ANSWER_tickler system is a system that reminds them of important deadlines and filing dates. Lease changes, billing info, dues dates, corporate reporting dates , accounting cutoff dates all maybe monitored by tickler system
identify reports common in the commercial real estate industry that aid building professionals in making decisions about use of space, funds, and interactions with tenants (15-16) - CORRECT_ANSWER_Vacancy, delinquency and rent roll are all import reports that help building professionals make decisions
What is the purpose of the audit trail? (16) - CORRECT_ANSWER_is to leave a record that auditors can verify
What specific information do these reports provide to decision makers? (15-16) - CORRECT_ANSWER_information about available funds, vacant space , churn rate, information for new tenants, potential tenants and effects on operating budgets due to a increase or loss of rent
Scenario - Chapter 2. Having been audited in the past, Clarkson Real Estate does not want to repeat that experience. Senior management decides to hire an experienced finance manager to clean up operations, require and maintain proper record-keeping procedures, - CORRECT_ANSWER_and ensure full compliance with laws and GAAP. Zelda has enjoyed the reputation of being such a person. Clarkson was able to hire her by making her a generous offer. She has accepted and looks forward to bringing everything up to standard.
Zelda calls her staff together for their first meeting. She correctly emphasizes that, first and
foremost,..blank.. is what creates the foundation for sound decision making based on information, proper year-end reconciliations, and for compliance with tax and legal requirements. - CORRECT_ANSWER_a. accurate record keeping
b. education in finance
c. managerial guidance
d. team dedication
a. accurate record keeping - CORRECT_ANSWER_
The controls that Zelda is implementing for the administration of accounts payable and receivable are both necessary and proper. She knows that the individuals who authorize
