BOMI Budgeting and Accounting Practice Exam

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• What items are typically included in internal reporting for real property operations?
• Why is a unique vendor number assigned in a vendor database?
• What is on a rent roll?
• What is the purpose of an audit trail in property management records?
• Lease interpretation helps ensure what?
• What is the Cash Journal used for?
• Which option is not a use of tax monies?
• What is the Basic Accounting Equation?
• Uncollectible rent should be recorded as what?
• Past budgets are part of the operating history. Past budgets should be reviewed for how many years?
• What does Dan believe about the role of Gina's guidance?
• If depreciation is NOT calculated for an asset acquired through a capital project, what is the likely tax outcome?
• Common types of prepaid expenses include:
• Which calculation is used to determine the debt service ratio?
• In a soft rental market, who typically pays for tenant improvements?
• The lease is a legally binding contract that does not obligate the landlord to provide lease reminder notices.
• In the Canadian depreciation framework, what adjustment is made in the year of acquisition?
• When rent is deemed uncollectible, which action is appropriate?
• In the context of debt service, what does the ratio indicate?
• What is an Account?
• What is the term for money owed to vendors and suppliers?
• The budgeting practice described suggests income is driven by which factor?
• Which statement provides a snapshot of the company’s financial position at a specific date?
• Which describes how debits and credits affect liabilities and owner's equity?
• How does vacancy affect operating expense recoveries?
• Which financial account records obligations owed to suppliers?
• When should monthly rent reminders be delivered relative to the due date?
• Which of the following factors is explicitly mentioned as part of lifecycle costing considerations?
• Which statement best describes a fixed cost?
• A building purchased for 400,000 with a loan of 320,000 has owner's equity of?
• What are semi-variable costs?
• What is the purpose of communicating budget variances to stakeholders?
• Which organization is NOT listed as providing benchmarking reports in commercial real estate?
• What describes compounding in interest calculations?
• Who should be alerted about budget variances?
• Which organization is described as a trade association providing benchmarking reports in the commercial real estate industry?
• Which budgeting approach involves updating forecasts by replacing the oldest period with a new one?
• If the window replacement project is approved, which sophisticated method would be used to compare this expenditure to alternatives?
• Which of the following is not among the ratios commonly used to determine earning power?
• Which statement shows the financial position at a specific date?
• What is the most typical factor causing cost variation?
• What is Owner's Equity?
• Which analysis concentrates on income streams and affordability rather than lifecycle costs?
• Which action should Nestor take to ensure comparability with BOMA data?
• Which combination contributes to the accuracy of budget projections?
• In income classification, which sequence is correct?
• Tenant files should include floor plans and keys and locks: yes?
• If the company takes out a loan to make capital purchases, money received should be recorded as what in Assets and Liabilities?
• When comparing earnings per share across companies, which factor should be considered to avoid misinterpretation?
• What are the components of net present value formula?
• What is the goal of the accountant during the holding period of the property?
• In the revenue cycle, which activity represents the final step?
• Which accounting basis recognizes revenue when earned and expenses when incurred?
• What is a chart of accounts?
• In double-entry accounting, what are the typical normal balances for income and expense accounts?
• Which statement describes the role of the general ledger in relation to financial statements?
• What does stable monetary unit mean?
• Under MACRS, the useful life of commercial nonresidential real property is depreciation over how many years?
• Under cash-basis accounting, expenses are recognized when?
• What is a vacancy report?
• What does the relationship between rent abatements and base rent generally imply?
• Which external report shows cash inflows and outflows during a period?
• Which item is a detailed summary of all cash disbursements or payments going out, typically indexed by cheque number?
• Which cost would be considered fixed?
• What is Kevin's primary objective in the budget and purchasing context?
• What is the primary purpose of Nestor using the Experience Exchange Report?
• In property management accounting, which statement best describes the role of accurate data and records?
• Which metric is a measure of earnings allocated to each outstanding share?
• Which statement describes the recording of one-time charges in the cash receipts journal?
• Mid-range figures in this benchmarking context reflect which percentage of data?
• Which statement best describes the primary objective of internal controls in financial operations?
• Escalation clauses in leases are used to?
• Capital improvement objectives should primarily aim to
• Under which basis are revenues recognized when earned and expenses incurred, regardless of when cash is received or paid?
• What is the owner's equity portion of the balance sheet for a building purchased for $300,000 with a loan of $225,000?
• What term describes the gap between actual operating expenses and those recoverable from tenants?
• What is base rent?
• When an expenditure is identified as a capital item, it should?
• Which statement describes stable monetary unit concept?
• Which statement best describes the effect of transfers on financial statements?
• Which statement most accurately connects lease clarity with revenue management in this scenario?
• Fill in the blanks: To increase the value of an asset you will ______ that asset account; to decrease the value, you will ______ that asset account.
• A tickler system is used to ensure timely handling of which items?
• Which lease structure is associated with the expense stop method described?
• Why are controls necessary?
• Which statement best describes cost accounting?
• In a commercial lease, what is often the 'additional rent' used to bill tenants for?
• Using the BOMA Chart of Accounts, the level that reflects functional categories of building operations is the which level?
• Which item is NOT typically included in the tenant file?
• What is the primary purpose of the statement of cash flows?
• Expenses unrelated to the management, maintenance, and repair of the building should be classified as which type of expense?
• Which organization codes GAAP standards?
• When posting income, what does the current outstanding balance represent?
• Which item is typically budgeted as other income in property operations?
• Which lease clause allows a landlord to recover advertising and promotional costs by sharing in tenant sales?
• Which statement best describes owner's equity?
• Which information is an appropriate example to enter into the vendor database?
• In a double net lease, which charges are paid separately by the tenant?
• If a property’s performance is compared with industry benchmarks, what is being assessed?
• In a cash basis income statement, which items should be properly classified and reflected?
• What is the purpose of the audit trail?
• In the scenario, what practice will be used to predict prospective tenants' income?
• In budgeting, what metric helps evaluate renewal efforts?
• Which statement best defines a general ledger?
• Which document is a concise summary of a lease used for quick reference?
• Which statement best describes a stepped rent rate?
• Amortization is the process described as:
• Which activity is primarily focused on capturing and organizing monetary events into ledgers?
• When estimating utilities expenses, which combination of factors should provide a reasonably accurate estimate?
• Expressing metrics on a per square foot basis primarily accomplishes what in benchmarking?
• From a legal perspective, income received by the owner of a property is considered to be what?
• What is the minimum number of buildings required to produce a mid-range report?
• What is used as the common benchmark in the commercial real estate industry?
• When comparing service vendors, Bonnie correctly compares which rates?
• Which budgeting method uses the prior year's budget as a starting point and adjusts for changes?
• In debt service ratio analysis, which element is primarily used to measure risk to lenders?
• How do building owners control costs?
• In evaluating a company's current ratio, what can affect the interpretation besides the ratio itself?
• Prepaid insurance should be recorded as what type of asset on the balance sheet?
• When transferring cash transactions, which statements are affected?
• What is the purpose of updating P.O records in the log?
• Which of the following is NOT one of the basic underlying accounting concepts described?
• When do rent and other charges to tenants begin according to standard practice?
• What is a tickler system?
• When budgeting the base rent for tenants of a strip mall, what is the initial step Bonnie should take?
• Which task would Janet not be responsible for as an accountant?
• Which term describes capital expenditure cuts not immediately needed for operation, safety, and property value?
• What is a primary benefit of depreciation for building professionals?
• Which factor might cause adjustments to the current ratio interpretation beyond the ratio itself?
• Which of the following is a common use for monies collected through mill rates?
• The files for tenant records should include floor plans and information on keys and locks. Zelda's correct response would be?
• Douglas' review of the general ledger provides assurance that accounting staff performed their jobs correctly. Which activity most directly provides that assurance?
• Which key components make up the bookkeeping process?
• Which lease provision gives the tenant the right to extend the term at the end of the lease?
• Which statement is commonly associated with rent abatements?
• Cash controls are procedures designed to:
• In real estate terminology, which lease is typically long-term and involves ownership of the land by the tenant?
• Which of the following is an advantage of using purchase orders?
• What term describes placing items into the correct categories on the cash basis income statement?
• What is the purpose of using the BOMA Chart of Accounts in budgeting and reporting?
• Which rent structure typically starts below market and increases over the life of the lease?
• Which statement best describes holdover rents?
• What is the General Journal?
• What should be the primary deliverable of the accountant during the holding period to decision makers?
• The process of recording debits and credits for each entry to the balance sheet is known as
• Which item is NOT typically tracked in a vendor database?
• Depreciation increases which balance sheet item?
• Which statement accurately reflects a cause of slippage?
• Which term describes the process of planning, tracking, and adjusting a budget to address deviations?
• Which of the following statements about capitalization rate is accurate?
• What general practice is emphasized by Hilda for reviewing tenant statements?
• Which item is not one of the three major financial transactions to monitor in property management?
• Which ratio is commonly used to determine a company's earning power?
• Which of the following is listed as a commonly used control type?
• Which statement describes separate entity concept?
• When reviewing contract expenses, what approach should building professionals consider?
• When the next accounting period opens, what happens to the current outstanding balance?
• If specific uncollectible rent amounts cannot be identified, what is recorded on the balance sheet to reflect this risk?
• Which statement best describes the sequencing when reviewing contracts for the next year?
• What is the General Ledger?
• What does a delinquency report describe?
• Why is invoice coding needed?
• What best describes responsibility budgeting?
• What does a company’s merchandise inventory turnover represent?
• Which statement best describes semi-variable costs?
• What is the benefit of stepped rent from a revenue management perspective?
• A purchase order (PO) log records the status of purchase orders. Which status indicates a PO has been issued?
• Which cost category is explicitly mentioned as part of the budget and income statement breakdown?
• Which statement describes the true average in the BOMA Experience Exchange Report?
• Which statement best describes the chart of accounts?
• What is a likely outcome of implementing cost-control measures by the property manager?
• Which items should be included in a delinquency report?
• The receivable summary report helps the owner determine which of the following?
• How is prorated rent applied in the commercial real estate industry?
• Which of the following is a stated offsetting operating variable?
• Earnings per share are commonly compared to companies in which categories?
• What is a suitable reason to provide variance explanations for budget variances?
• A review engagement provides which level of assurance?
• Which statements describe the budgeting process?
• Which term describes a debt that is owed?
• Which budget focuses on expected costs for the coming year rather than revenue?
• Which statement about the Experience Exchange Report is correct?
• In variance analysis, budget variances should be communicated on what basis?
• Which information is typically included in a PO log?
• In a gross lease, which party typically bears the cost of property operating expenses?
• What are the three major categories reported on a balance sheet?
• Which statement is an advantage of using purchase orders?
• Assets typically have which type of balance, and how do entries affect them?
• Who checks the invoice for accuracy in the accounts payable workflow?
• Which report would be most useful for assessing current occupancy and rental income, listing all tenants and their rents?
• In Scenario - Nestor, what should he know from financial statements?
• In scheduling tenant base rent, which data should be included on the base rent worksheet?
• What are the three cost types?
• Amortization is defined as:
• If a company is deficient in working capital, what might happen?
• Capital budgeting decisions consider whether an expenditure will generate future cash flows and/or improve asset value.
• When evaluating vendor RFPs, which factor is not typically a concern for Kevin?
• Reviewing the rent roll helps determine which of the following?
• In double-entry accounting, every transaction affects at least which number of accounts?
• Which item is not typically included in the tenant file?
• What purpose do records serve?
• Under accrual basis accounting, when should expenses for services performed be recorded?
• What are the benchmarks against which a property's actual performance can be compared?
• Which statement is correct regarding rent components?
• Under cash basis accounting, when is revenue recognized?
• Besides BOMA International and the Institute of Real Estate Management, which organization can Nestor obtain benchmarking reports from for the commercial real estate industry?
• What is a primary purpose of maintaining accurate building records?
• Depreciation expense appears on which financial statement?
• Which cycle involves obtaining assets, using them, and reporting on their use?
• What is the common means used to notify tenants of billings?
• Which action is taken when processing Heavenly Cleaners' invoice to ensure proper payment?
• The lease agreement should include a letter specifying the exact date of lease commencement and expiration. What is this letter called?
• In vendor relations, what effect does aligning authorization with payments have?
• Which item is not part of the tickler system's monitoring list?
• Prepaid expenses are typically classified on the balance sheet as which of the following?
• What is the current year to date used for in operating history reviews?
• Mid-range describes data distribution around which portion of the data?
• What equation should hold after transfers if entries are correct?
• Which of the following best describes base rent in relation to increases?
• Which budgeting method maintains a fixed budget for the period regardless of actual activity?
• When supplies are used in the operation of the property, the applicable cost value is transferred from which statement to which?
• Which stage involves identifying a success ratio in obtaining renewals for leases expiring during the year?
• Which description best matches a modified gross lease?
• Which statement best describes the function of tenant reminder notices?
• In the Experience Exchange Report, true averages measure costs or income per square foot based on which data characteristic?
• Which sequence correctly outlines major steps in the revenue cycle for this property?
• What is a standard method for reporting escalatable costs?
• Which statement best describes Hilda's overall approach to liquidity and capitalization in the given context?
• In the scenario, what does Zelda say forms the foundation for sound decision making?
• Why is the expense budget typically prepared on a monthly basis?
• What is the term for the difference between actual results and budgeted expectations?
• Why is record keeping important?
• In base rent, what is being returned to the landlord's investment?
• If Phil prepares the expense budget properly, how should the line items in the budget be reported?
• Which statement best describes a journal entry?
• Which of the following is a net lease type?
• If receipts were not recorded, the bank balance will be higher than the property's balance. Likewise, if bank service charges were not recorded, the bank balance will be lower than the property's balance.
• Which document contains the product or service requested, prices, and payment terms?
• Which term describes a formal record that records both a debit and a credit for a financial transaction?
• An unqualified audit opinion is best described as a statement that the financial statements are presented
• What is the ultimate financial goal for Carmichael Properties in the scenario?
• What does a budget reflect?
• What was Natalie's first action after joining Carmichael Properties?
• The Experience Exchange Report compares mall performance using which metric?
• What is the practical use of the Experience Exchange Report data for building professionals?
• Which document records changes to a lease over time?
• Which lease clause governs charges when a tenant pays rent late?
• Discounting is the process of determining the value of an investment based on expected future cash flows; which value is being determined?
• Posting total disbursements to the cash account is recorded on which side of the cash account?
• The operating history is used in budgeting because it provides what kind of insight?
• In revising a budget, which item should owners and building management primarily consider?
• In the scenario, what is emphasized about applying knowledge in real-world situations?
• Which item is included in a tenant file?
• Which of the following is a typical administrative cost?
• In a soft leasing market, what concession might a landlord offer?
• Which describes the objective of internal controls in property management?
• What is the first step in the typical journey after quotes are received?
• Which cost is affected by occupancy changes?
• What is a primary benefit of percentage rent for the owner?
• What is the most typical factor affecting variation in building costs?
• What is true for both sides of the accounting equation?
• The process of allocating the cost of a prepaid asset or an intangible asset over the period benefited is called?
• How should budgets and leases be handled in Sheila's approach?
• Which statement about working capital is true?
• Which statement shows revenues earned and expenses incurred, resulting in net income or net loss?
• Budget variances should be based on accurate information to ensure what?
• What practice is emphasized as essential when communicating charges to tenants?
• Which item is included in the tenant file?
• Which item is a typical update to the rent roll?
• Which term describes rent that covers costs beyond base rent, such as operating expenses?
• Which sequence represents the levels of detail in the BOMA Chart of Accounts?
• If two companies have identical earnings but different numbers of shares outstanding, what happens to earnings per share?
• Which factor should be considered when selecting investment options in a capital budget?
• In rent abatements, rents are typically added to the rent periods and may apply to which rent component?
• Which of the following is NOT a function of the revenue cycle?
• Cash receipts are transferred to the income statement as which entries, and total receipts are transferred to the cash account as which entries?
• Which describes how debits and credits affect assets?
• Which feature described for Ideal Towers would enhance tenant appeal in a downtown setting?
• Which item is not listed as a benchmark for a property's performance?
• Which costs are typically billed as additional rent?
• If base rent is $25,000 per month and holdover rate is 1.25, what is the holdover rent per month?
• A financial statement audit would most likely yield an unqualified opinion when:
• What is the primary purpose of accounting control strategies in real estate?
• What is BOMA International's Functional Accounting Guide?
• In the expense stop rule, what happens when the stop is reached?
• Which item is not typically included in the tenant file?
• The difference between recoverable operating expenses and actual operating expenses is known as which term?
• What was the explicit objective of hiring Elvin as property manager?
• Which expense is directly or indirectly affected by changes in occupancy?
• What is the first step in coding invoices?
• Which of the following is a likely component of a variance analysis report?
• What is the purpose of including future stepped rent increases in budgeting?
• International accounting standards are established by which board?
• What is the purpose of budget variances?
• Which lease type is commonly described as 'net-net-net' because the tenant pays rent plus taxes, insurance, and maintenance?
• If a mid-range report is not produced for a dataset, it most likely means what?
• Which factor is essential to include in the base rent worksheet to ensure accurate budgeting?
• What is the meaning of an unqualified audit opinion?
• In budget planning, the document that outlines expected operating costs for the coming year is called the:
• Which document shows that tenants have paid rent in accordance with the budget and lease agreements, including reimbursements and security deposits?
• Which entry records cash disbursements into expense accounts?
• What principle is emphasized when communicating charges to tenants?
• If an audit report is described as a 'clean' opinion, this is an example of which type of audit opinion?
• What is Hilda's role in Peachtree as described?
• After a purchase order is approved, what copy is sent to the property manager?
• Define Accrual Basis Accounting.
• Why do creditors prefer a higher equity percentage in a company?
• Which item is an example of an intangible asset with expenses that are usually amortized?
• Direct capitalization involves dividing net operating income by the capitalization rate to estimate property value. Which statement best describes this value estimate?
• To verify that cash receipts match bank deposits, which document would you consult?
• Who is responsible for overseeing and financing carpet installation in the described scenario?
• What does base year mean in cost escalation calculations?
• If rent collections, reimbursements, and security deposits are not reflected in the receivable summary report, what could this indicate?
• What type of information do these reports provide to decision makers?
• In the Skyward scenario, who will take Gina's place?
• Which document typically lists tenants, their suites, rents, and lease expiration dates?
• Standard financial statements consist of which three reports?
• Which report helps building professionals decide about use of space, funds, and interactions with tenants?
• In double-entry accounting, which entry increases an asset account?
• Which of the following is commonly created with information contained in a lease abstract?
• Which financial statement provides a summary of all cash inflows and outflows during a period?
• What is the final step in the described PO journey?
• Which item is a common element that needs updating in the rent roll?
• What procedure is associated with the administration of the cash receipts journal?
• Expenditure cycle describes acquiring property, paying for it, and reporting on what is acquired and paid for.
• If depreciation for an asset acquired through a capital project is not calculated, taxes must be paid for it; compared to if depreciation were calculated, taxes would be:
• For transfers, which statement about journal entries is true?
• Which components are shown on the balance sheet to reflect the current financial position?
• Which of the following best reflects the aim of using tenant statements according to the scenario?
• If there are eight data points in a data set and the two middle values are 0.84 and 0.96, what is the median?
• Which of the following measures profitability relative to equity?
• Building management is granted one right of appeal for tax assessments. Which frequency is correct?
• Common-size comparative statements are used to compare earning power across companies.
• Which equation expresses the fundamental relationship in accounting?
• Which of the following is NOT one of the three common financial statements used for external reporting?
• What is the primary function of the payment register in commercial property management?
• When reviewing a building's operating history, what range of past budgets is commonly included?
• Which step best describes discounting in capital budgeting?
• The tickler system monitors due dates for all of the following except:
• When estimating utilities expenses, which factor should be considered?
• What is the means companies use to organize how the company orders and buys what is needed?
• To calculate each tenant's share of property cost increases, the calculation multiplies the net cost increase by which factor?
• Which standards should be in place when processing invoices?
• Under the expense stop rule in a modified gross lease, when the stop is reached, who starts paying?
• As data size grows with more buildings contributing data, the reliability of averages generally:
• Which term is not a net lease type but is listed in the material as a lease concept?
• Which document helps outline the goods and general terms of the purchase?
• Which metric represents the profitability earned per share of common stock?
• Total disbursements are transferred to the cash account as a what?
• Which item is an example of information that should be entered into the vendor database?
• Not a concern when updating the rent roll?
• The first page or two of a lease abstract is referred to as business points and includes important dates and all rental payments including changes and increases. Which term describes this section?
• What does a purchase order contain?
• Which report should reflect rent payments received, reimbursements, security deposits, and other collections?
• What does the term expense stop refer to?
• The monies paid to public agencies and municipalities from property taxes can include all of the following uses except
• The budgeting approach described (leasing and operations budgets prepared by different managers) is an example of?
• In audit reporting, a qualified opinion indicates:
• What is Asset?
• A typical variable cost example is:
• Which statement best describes the treatment of budget information under cash basis accounting?
• In calculating the net present value, the initial investment is which of the following?
• Sheila adheres to best practices and follows the specific details written into leases. What does this help ensure?
• A prospective tenant wants the landlord to pay all property operating expenses. Which lease type is this?
• What is the most common error in properly administering tenant leases that internal controls should prevent?
• Which term describes the cost analysis that focuses on total ownership costs over the asset's life and includes ongoing expenses?
• Which item is not a prepaid expense?
• Which term describes earning interest on both the initial amount and previously earned interest?
• When evaluating the current ratio, which adjustments might need to be considered?
• Which accounting framework is referenced for compliance?
• An absolute net lease is most similar to which of the following?
• GAAP is used to guide the preparation of which documents?
• If there is a material variance from the budget, the mall owners may inform the owners early so that they may:
• In the context of lease documentation for a national chain branch, what must be documented when proceeding with a rental?
• What does CAM stand for in lease terminology?
• Which document provides a concise summary of a lease for management reference?
• Which charges are entered directly into the cash receipts journal in the month they occur?
• Under a lease with a CPI-based rent increase, increases are determined by comparing the anniversary CPI to the base CPI.
• Increasing the sample size generally improves which attribute?
• Which items are typically included in a five-year capital plan?
• Which statement reflects the main function of a lease?
• Which statement about gross and modified gross leases is accurate?
• Define Revenue Cycle.
• Which of the following are common offsetting variables in a budget comparison?
• What is the purpose of checks and balances in internal controls?
• What is a primary purpose of cost categorization in property accounting?
• Which statement about escalatable costs is correct?
• The owner's contributions or initial investment describe which term?
• What is the purpose of submitting RFPs to multiple cleaning vendors in this scenario?
• What is the purpose of separating the budget into categories like administrative costs, cleaning costs, real estate taxes, and building insurance?
• What is pro forma typically used for?
• Holdover rent is typically calculated as a multiple of which amount?
• Which of the following is not one of the three common financial statements used for external reporting?
• Which statement best explains the rationale for aligning line items with BOMA reporting data?
• What is the main function of a lease?
• On what basis are invoice approval levels typically determined?
• What does going concern mean?
• What is the focus of the field review in relation to budget variances?
• Which of the following is a component of the basic accounting equation?
• The PO log is a numerical listing of all purchase orders. Which status term would best describe a PO that has been issued?
• What are the common objectives of capital improvements?
• In double-entry bookkeeping, when cash receipts increase cash, what is the effect on the cash account?
• When should changes to monthly estimates for expense portions of leases be communicated to tenants to become effective with January rent?
• If the proposed investment's NOI remains constant and the capitalization rate increases from 6% to 8%, what happens to the estimated value?
• What is the primary purpose of the cash flow statement?
• Which item would not appear in a payment register?
• Which term is used for increases in rent that are scheduled over the lease term?
• In a single-net lease, which cost is paid by the tenant in addition to base rent?
• Which factor is the primary driver of cost variation in facilities management?
• Which budgeting method requires justification for every expense as if starting from zero?
• What is a management agreement?
• In the described process, total receipts are transferred to the cash account as debits. What does a debit indicate in the cash account?
• Which factors are considered in lifecycle costing for a capital project?
• GAAP consists of what components?
• Which term describes the median of a data set?
• Which term describes the rent schedule of increases over time?
• A high merchandise turnover is associated with which characteristic in merchandising and inventory strategy?
• From a working capital perspective, what does a high inventory turnover indicate?
• Which statement best describes the level of detail for reporting budget line items?
• Why is attention to accounts payable important?
• Which term describes something owned and of value?
• What past failure is described in the scenario?
• Which term describes the schedule of rent increases often referred to as rent steps?
• In mid-range data, the low mid-range figure is the number below which 25 percent of data lie, and the high mid-range figure is the number above which 25 percent lie.
• What is required to schedule base rent?
• If a project's net present value is positive, what should management do?
• Which statement describes net operating income?
• Setting aside cash reserves for future projects, which concept describes earning interest on both the principal and the accumulated interest?
• Transfers that are complete with a debit and a credit are known as what?
• Which item would be considered a profitability measure associated with equity?
• What does the debt service ratio measure?
• Which action is typically used to address late rent payments in a lease?
• Paying a prepaid expense affects the cash flow statement as what type of outflow?
• Which ratio would you use to evaluate how effectively a company uses equity to generate profits?
• Which financial statement shows the financial position of a company at a specific date?
• Which are the three basic external reports?
• Which ratio is commonly used to determine earning power of a company?
• What is the primary purpose of a variance analysis?
• Which cycle includes paying for property, goods, services, and labor and reporting what is acquired and what is paid for?
• What are the benefits of maintaining adequate working capital?
• In real estate valuations, which statement best describes capitalization rate used to estimate value?
• In Miguel's approach, what is the recommended first step when a problem or tenant complaint occurs?
• Tenant moving allowances are best described as which type of asset?
• In determining a company's debt service ratio, which adjustment is made to income to measure the income available to pay debt service?
• Which statement best defines mid-range data in the BOMA report?
• In the context of using purchase orders, what is another advantage besides outlining goods and terms?
• What is the initial step the new property manager takes to gain cost control?
• In data central tendency, which measure is described as the true midpoint of the data?
• Which statement ensures that every transaction affects at least one debit and one credit?
• A review engagement provides what level of assurance?
• What is the correct interpretation of the purpose of a purchase order?
• When performing a field review of financial statements, which consideration is appropriate?
• Which accounts are summarized on the balance sheet?
• High merchandise turnover in retail and manufacturing indicates what about merchandising and inventory investment?
• In preparing for an audit of property records, the audit trail should be verifiable by whom?
• Which statement best describes a single net lease?
• Which metric is calculated as net income divided by shareholders' equity and is commonly used to assess earning power?
• How do senior management respond to Kevin's cost-control efforts?
• Which item is included in the tenant file?
• The detailed summary of all cash disbursements that is not organized by check number is the
• Which statement best describes the role of records in compliance?
• Which roles are typically responsible for reviewing tenant financial statements in a commercial property?
• Gross wages on a payroll register refers to the total earnings before deductions.
• What does Net Operating Income represent in the capitalization rate calculation?
• Which features described for Ideal Towers would appeal to tenants and potentially support occupancy?
• Which item is primarily used to compare financial statements on a common basis across periods?
• Define Income Statement.
• What are Accounts Payable?
• Which period is used as the comparison base for rent escalations tied to CPI in the example?
• Who is primarily responsible for ensuring timely payment of base rent under a lease?
• Which sequence correctly describes the basic flow described in the material?
• Which statement best describes which costs are paid by the landlord in a gross lease?
• Which option best defines segregation of duties in internal controls?
• Identify the step that involves evaluating renewal success in lease management budgeting.
• According to standard practice, which benchmarks should be used to evaluate performance?
• In posting income, where is the income eventually recorded?
• What is the intended purpose of including a percentage rent clause in Carmichael Properties' leases?
• How is base rent per square foot or monthly rent obtained when scheduling base rent?
• What is a typical tenant file?
• The costs of a new fire alarm system are expected to be reclassified in next year's budget to ensure which payments are reflected?
• What strategy might be employed in the process of appealing a property tax?
• Recurring monthly charges are typically copied from the tenant database into which accounting record?
• If the price on a PO differs from the invoice, what should be done?
• What are the two commonly recognized categories of rent?
• Which item is listed among the ratios for earning power alongside ROE and EPS?
• Of the four stages in budgeting base rent, which uses the most reliable information?
• To locate the median in a dataset, you identify the value halfway through the ordered data.
• If occupancy levels fluctuate, which operating expense is most likely to be affected?
• In a single net lease, which statement best describes the arrangement?
• Why is the discount rate used in discounting present value?
• Which statement about vendor databases is correct?
• Which action is appropriate when an unfavorable variance in expenses is identified?
• Under cash basis accounting, which of the following is recognized at the time of cash receipt?
• Assuming journal entries are properly prepared, which equality should hold after all transfers are made?
• Which item is least likely to be kept in a vendor database for ongoing management?
• Under accrual accounting, when is a cleaning expense recognized?
• All of the following are considered accounts payable except:
• What does future stepped rent increases refer to?
• The process of planning for the coordination of resources and expenditures is known as?
• In the commercial real estate industry, how is a stepped rent rate typically described?
• The debt service ratio is defined as what?
• Which elements are commonly seen on the payroll register?
• In bank reconciliation, the bank's records should reflect each cash receipt and which of the following during the month?
• What is pro rata share?
• Which term describes costs subject to escalation that are allocated among tenants?
• Which document would Best Properties have used as a projection of the property's expenses over time and to monitor the operation to ensure projections are met or exceeded?
• Which item is an example of information that should be checked against the budget during invoice coding?
• Why is lessee documentation important?
• How is merchandising inventory turnover calculated?
• Which organization publishes the Experience Exchange Report used for benchmarking in commercial real estate?
• Which statement best describes capital improvements in relation to asset value and returns?
• What is a chart of accounts?
• Which lease clause should Miguel consult to confirm whether or not he should hold off on assessing rent charges for the tenant until the carpet installation is complete?
• What risk does bypassing the lease for one tenant pose?
• What is a primary reason for lease interpretation?
• Holdover rent is calculated as a multiplier of the base rent. Which option correctly states this concept?
• Earnings per share comparisons are typically made with companies in the same industry and within the same market size.
• Which of the following is the primary purpose of a PO log?
• What does prorated rent adjust for in a partial occupancy month?
• What does a tickler system remind you about?
• What are Accounts Receivable?
• Which cost analysis term refers to evaluating the total costs of a project over its life, including acquisition, operation, maintenance, and disposal?
• In Canada, how are depreciation rates determined?
• In the Lakeview Office Park scenario, who is primarily responsible for providing budget reporting to the owner?
• Which document would you consult to quickly view occupancy status and tenant details property-wide?
• What frequency is used for building-by-building comparison of actual operating income and expenses against the budget to determine success?
• What is the primary characteristic of a percentage rent clause?
• How are holdover rents calculated?
• Which clause may allow the owner to terminate the lease if sales levels are not met in a percentage rent agreement?
• Despite having good condition and desirable locations, what is Carmichael's properties' performance in NOI?
• What is typically the most significant source of cash inflow for a commercial building?
• Under accrual accounting, when is revenue recognized?
• How should variances be communicated to the owner?
• Which description best characterizes the Experience Exchange Report?
• What is an explicit advantage of using purchase orders?
• A qualified opinion is issued when there is a material misstatement that is not pervasive.
• Which statement best describes the roles filled by accounting?
• A lease abstract is an overview of the most frequently referenced items in a lease.
• Which event occurs after goods or services are received?
• In internal controls, which statement is supported?
• Why is the first month's rent often prorated?
• What process is the office finance staff using?
• In leasing considerations, what might be true in a soft market?
• Which document shows space allocation and expiration dates on each floor?
• In commercial real estate accounting, expenses are segregated by functional cause; which is an example?
• What is rent roll used for?
• Which statement best describes the discounting process?
• What is the primary function of a lease?
• Regardless of experience, the law assumes that as a property manager, he is a .. and held to a standard ..
• The budgeting base rent projection in the 90-95 percent range is achieved by combining market conditions with which set of factors?
• A document used to project property expenses over time and monitor performance against projections is called a:
• Which statement describes how the true average is computed?
• What type of budget explanations are commonly required by owners?
• If a staff forgot to record a bank service charge, the bank balance would be lower than the property's balance.
• In the BOMA Chart of Accounts levels, what does the second level describe?
• In a net lease, the tenant pays rent plus some operating costs; in a triple net lease, which additional costs are paid by the tenant?
• Which lease type describes a scenario where the tenant pays base rent and operating expenses, while taxes are paid separately?
• What regulations exist regarding depreciation in the United States?
• If Janet performs an accounting function, she will do which with financial data?
• When the number of data points is odd, the median is the middle value. When the number of data points is even, how is the median determined?
• What does FUTA stand for, and who sets its rate?
• In a typical PO flow, which of the following describes the copies produced?
• Working capital is best described as the difference between which two categories on the balance sheet?
• Which document shows how space is allocated among tenants on each floor and provides a visual of vacant suites and lease expirations?
• If two companies have identical earnings but different numbers of shares outstanding, which statement is true about earnings per share?
• Records convert raw data into a __________ for later reference and retrieval.
• What is the term for the portion of costs subject to escalation in a lease?
• In benchmarking data, what term describes the number of buildings included in the data sample?
• What factor best demonstrates a vendor's ability to deliver on a project?
• To estimate utility costs for the upcoming year, which could Phil reasonably use?
• What does NOI represent in property management context?
• What approach is recommended for addressing delinquent tenant payments?
• Discounting converts expected future cash inflows to their present value.
• Which are the three summary account types?
• To compare data to BOMA's Experience Exchange Report, which items must correspond with the information reported for the reference property?
• When creating a budget, you plan for financing expenditures in the next year.
• What are the three functions of the revenue cycle?
• Which item is commonly included as a billable expense under operating costs?
• CAM charges are typically passed through to tenants as which rent type?
• Which item is not typically tracked in a vendor database?
• What is the purpose of a security deposit?
• For other income sources such as parking, storage, and rooftop solar, what scheduling is required to show additional rent charges?
• To quickly review the full payment history for each distinctive vendor providing services at Bayview Mall, which report should be used?
• What best describes the overall budgeting approach in the City Medical Complex scenario?
• The most basic basis for preparing financial reports is:
• In the City Medical Complex scenario, how many vendors should RFPs be delivered to for proper consideration?
• Which financial statement summarizes changes in cash from one year to the next?
• Which of the following best describes a 'qualified' opinion?
• When planning a capital budget, which approach supports affordability while pursuing upgrades?
• In income classification, what should be assigned to each category of income to support reporting?
• The tickler system's purpose is to track due dates of tasks and payments.
• Balancing the books deals with which components?
• Why are multiple cost accounts established in budgeting and accounting?
• Which of the following best defines an intangible asset?
• CAM charges are typically billed as which rent type?
• What is bookkeeping?
• What is the primary purpose of providing variance explanations in budget management?
• How are CPI increases determined?
• What is a Balance Sheet?
• When evaluating current ratio adjustments, which elements are considered?
• Recognizing revenue during the period it is earned and recognizing expenses when the obligation to pay is incurred is called the:
• Which item is not typically included on a base rent worksheet for tenants?
• The report uses which factor to determine the sample size for each item of comparison?
• In a cash basis environment, the basic accounting equation is illustrated by cash receipts minus cash disbursements equaling the change in the cash account.
• Cutting only proposed capital expenditures that are not immediately needed for effective operation, safety, and the value of the property is generally considered to be:
• If a material budget variance is detected, management should:
• Which elements should be considered when comparing vendors?
• Which statement correctly describes accrual accounting for expenses?
• When a national chain tenant elects to rent, what action is necessary regarding the lessee's identity?
• Which factors influence success ratio projections for lease renewals?
• In scheduling tenant base rent, which data should be included on the rent worksheet?
• Which statement best describes a triple net lease?
• Which of the following is a recurring cost in a building's budget?
• Define Expenditure Cycle.
• What are the primary functions of accounting?
• What is the role in budgeting for tenants with respect to base rents?
• Which statement best describes the purpose of the Experience Exchange Report?
• What is a variable cost?
• What is the primary purpose of a bank reconciliation?
• Which of the following describes the role of owners in cost control?
• Which cycle is primarily responsible for recording purchases and paying suppliers?
• How is the unpaid invoice report used?
• Upon receipt of an invoice, Kevin should first take which action?
• What is an expense stop (base amount)?
• Which metric is described as measuring costs or income on a per square foot basis?
• Which CPI value is compared to the base CPI to determine rent increases in the example?
• Scenario: Jennifer demands detailed information on operations; what budget reporting frequency would reflect her requirements?
• One of the global GAAP assumptions is going concern, which implies the entity will continue operations for the foreseeable future.
• Besides past budgets, a review of operating history may identify which of the following?
• Which accounting basis is also known as a hybrid approach?
• In Zelda's controls for accounts payable and receivable, the individuals who authorize payments should ... relative to those who issue checks.
• With a capitalization rate of 6% and net operating income of $150,000, what is the estimated property value?
• What is the primary goal of the property management?
• Which activities are considered primary functions of budgeting?
• From a legal perspective, which statement correctly describes rent?
• For all cash transaction transfers between the balance sheet and the cash basis income statement, these transfers are referred to as
• How is a delinquency report best described?
• Which item is included in a tenant file to manage access control?
• What does holdover refer to?
• Which items are typically treated as prepaid expenses?
• What does a cash flow statement describe?
• Which statement best describes mid-range data's role?
• What is Hilda's intended use of tenant financial statements?
• In the balance sheet equation, assets equal liabilities plus owner's equity.
• Which practice would help reduce the difference between recoverable and actual operating expenses?
• Which statement about an unqualified opinion is true?
• Which document is used to visualize space allocation and vacancy status on each floor?
• What does the concept of separate entity mean?
• How is the cash flow statement used?
• Which approach describes an alternative strategy to review data in the Experience Exchange Report?
• Which of the following best defines working capital?
• Which term describes ongoing business operations without interruption?
• Which trio are major financial transactions to monitor during property management?
• How do the property and facility managers use periodic financial reports?
• What instruction supports payment efficiency and accuracy when processing invoices?
• What must accompany each transfer of cash transactions between the income statement and the balance sheet?
• Which lease type typically places the most operating expense risk on the tenant?
• In a building's operating history review, what item is commonly highlighted besides budgets?
• What describes the budgeting approach described in the material?
• Compound interest results in earning interest on what?
• In evaluating a new hire's budgeting and accounting understanding, what should the focus be?
• Under a modified gross lease, who pays the incremental increase beyond the base amount?
• What is the intended financial effect when the fire alarm costs are reclassified in the budget?
• Define the Cash Method.
• How is a checks and balances system established?
• If Phil is estimating next year's utility costs, which could he reasonably use?
• Which budgeting method would you choose when you need to revalidate every line item from scratch due to major organizational changes?
• To know monies earned but not yet received, which financial statement would you consult?
• What is the typical recourse when a budget variance is identified?
• What is a typical component in reviewing a building's operating history beyond budgets?
• Which statement about the reliability of the Experience Exchange Report for long-term planning is true?
• Which statement best describes compounding in capital budgeting?
• Which of the following best describes an account's scope?
• What is the correct description of nonrecoverable expenses?
• Bank reconciliation helps identify timing differences and errors when comparing the company’s cash records to the bank statement. Which item is it primarily identifying?
• Which expression correctly represents the present value of a future amount when using a discount rate i over n periods?
• What is the purpose of including minority status in vendor data?
• Which two strategies help lessen the difference between recoverable operating expenses and actual operating expenses?
• BOMA International's Functional Accounting Guide is specific to the commercial real estate industry in that it segregates expenses according to the:
• Which component comprises a bank's records for a property that uses the bank's services?
• What is the outcome of agreeing on a price before issuing a purchase order?
• Under accrual basis accounting, when should building expenses be recorded?
• Which costs are most likely to vary with occupancy?
• In tenancy agreements, missing a letter that states the lease commencement date can cause ambiguity. What is this letter?
• What does an unpaid invoice report help determine?
• Which of the following are categories of escalatable costs?
• Which item is a record that lists all issued purchase orders?
• In the Peachtree scenario, who is responsible for completing a high level, but not a detailed review of tenant financial statements?
• Which is NOT typically included as a common lease clause significant to building professionals and tenants?
• Which asset types are commonly amortized?
• In the experience exchange benchmarking, how is the sample size determined for the data?
• Which statement about the purchase order is true?
• What might cause differences in cash balance as recorded by the bank and the property's books?
• What is the typical journey of a purchase order?
• What is Miguel's recommended approach when dealing with tenant issues?
• What is the meaning of an unqualified audit opinion?
• Which clause allows the landlord to recover advertising and promotional costs by sharing in tenant sales?
• Which of the following is an example of a semi-variable cost?
• Occupancy changes can affect which cost?
• In an RFP, open-ended questions may be valuable, but what is essential to enable objective comparison of proposals?
• What is the second main category of rent alongside base rent?
• Which of the following is a limitation of the Experience Exchange Report data?
• In the Lakeview scenario, what does Jennifer demand from the property manager?
• If Jennifer is unsatisfied with the property tax assessment, building management is granted one right of appeal. How often is that right exercised?
• Which statement about the interaction between the general ledger and financial statements is accurate?
• What does compounding refer to in capital budgeting?
• What is Budgeting?
• What is the localize cost excess concept focused on with respect to cost accounts?
• Periodic financial reports are used to plan budgets and support decisions aimed at which goals?
• Which financial concept explains why future cash flows are valued less than present cash flows?
• Which collection of reports would be most comprehensive for evaluating current tenant occupancy and rent payments?
• Which accounting method is not conforming to GAAP and is contrasted with accrual accounting in budget discussions?
• Which statement best describes how rent abatements relate to base rent and operating expenses?
• Who should provide tenants with information and explanations about charges?
• Charges such as operating expenses, real estate taxes, and CAM are typically billed as which rent type?
• Which statement best describes internal controls?
• When analyzing balance sheets, which metric is highlighted as enabling companies to carry sufficient inventories, meet current debts, and take advantage of cash discounts?
• Which cycles are most common in commercial real estate management?
• What is the process of recording and classifying transactions called?
• What is a Chart of Accounts?
• A common ratio used to determine earning power for a C corporation would be found in which type of statements?
• The Experience Exchange Report uses which metric to compare mall performance?
• Which percentage range is cited as a high success ratio in budgeting projections?
• The monies paid to public agencies and municipalities from property taxes can include all of the following uses except:
• Which practice is recommended when evaluating property performance against benchmarks?
• When developing an RFP, how should requirements be written to ensure useful information from potential vendors?
• What is an audit trail?
• The discount rate used in net present value analysis is typically the project's cost of capital or hurdle rate.
• In analyzing earning power for a corporation, which financial statement approach is described as using a common-size perspective?
• Which are two methods for assessing modified gross lease rent increases?
• Which statement correctly characterizes Accounts Payable?
• What current ratio is commonly regarded as a good measure of debt-paying ability, subject to adjustments for business factors?
• What is the primary purpose of accounting (internal) controls?
• Owners are involved in cost control via all of the following means except?
• Which of the following is an example of an offsetting operating variable?
• What is the primary purpose of the expense distribution report?
• What is the function of the holding file in accounts payable?
• What is a Liability?
• Which equation represents the basic accounting identity?
• If a material variance is detected, what action is suggested as the first step?
• Which item is not typically used among earning power ratios?
• Who is responsible for assigning a chart of accounts code to each category of income?
• When evaluating vendors, which non-price factors are important?
• What initial conclusion did Elvin reach about the building's financial records?
• Owner's equity typically carries which balance, and how does it respond to credits and debits?
• Gina asks Dan how these expenses should be categorized such as taxes, insurance, and contracts for services. He says they are most often what?
• Which statement best describes the overall purpose of a lease abstract?
• Which item is most likely included in tenant files according to Zelda's practice?
• Which statement is NOT one of the basic concepts underlying financial statements as described?
• In the context of evaluating a property, what is the broader purpose of evaluating performance against benchmarks?
• As property manager, Rudy approves invoices for payment, but he knows that some invoices, such as an invoice for ..blank.., will require approval from the owners.
• What is the goal of the property or facility manager during the holding period of the property?
• What is accounting?
• Which statement about the benefits of good record keeping is not accurate?
• What are transactions?
• What is an advantage of using purchase orders?
• What foundation supports the budgeting plan?
• If a dataset has an even number of observations, which values contribute to the median?
• What is a purchase order?
• What does a budget reflect?
• Which of the following statements most accurately describes the 'Separate Entity' assumption?
• Zero-base budgeting is used to determine what?
• In benchmarking, which metric is commonly used as a baseline for comparisons?
• What is the relationship between inventory turnover and required inventory investment for a given sales level?
• Property and facility managers should have a ______ system to remind them of key deadlines and filing dates.
• Rent roll changes are used to update which document?
• All proposals are expected to produce benefits for more than one year. This method, which factors in all current and future financial ramifications, is known as:
• Which statement accurately describes the effect of bank service charges on the bank balance relative to the property's books?
• Which of the following is a known limitation of industry comparisons?
• In budget comparisons, what does a favorable variance indicate?
• What is the typical time frame for preparing an expense budget?
• Under a predetermined cost threshold policy, who pays for tenant improvements if the cost falls below the threshold?
• In bank-related property records, which document helps determine that reimbursements and security deposits are reflected?
• Which element would you expect to find on a payroll register?
• What is an example of a common billable expense on a lease?
• BOMA's Experience Exchange Report data are typically how many months old?
• Which item should be included in a tenant file?
• How is prorated rent calculated when a tenant is absent for part of the month?
• Which of the following best describes an ROI consideration in capital budgeting?
• Which statement about detailing budget line items is correct?
• Which option correctly states the data combination that yields a high 90-95% budget projection?
• Which analysis emphasizes evaluating risk and uncertainty in cost estimates for budgeting decisions?
• What action should be taken to ensure tenant pass-through payments are reflected in the next year's budget?
• Which of the following is a cost category example often tracked in property accounting?
• Which ratio is commonly used to assess earning power and is calculated using net income and shareholders' equity?
• In calculating each tenant's share of escalated costs, you multiply the net cost increase by the tenant's pro rata share.
• If a company’s financial statements have a material misstatement but the auditor deems it not pervasive, which opinion results?
• A purchase order is drawn after price agreement. Which statement describes a purchase order?
• Which basis of accounting is referenced for reflecting expenses and income in the described budget process?
• Which statement is true about the legal nature of a lease?
• What is the second method described for abstracting a lease?
• Which budgeting practice is illustrated by having the leasing team draft the leasing budget and the operations manager draft the building operating budget?
• In a correctly prepared general ledger, cash disbursements are transferred to expense accounts as a what?
• Creditors prefer a high proportion of owner's equity because this equity:
• Which activity is a stage in budgeting base rent?
• Which items relate to billing and financial reporting in a tenant file?
• Which option describes a common error to avoid when coding invoices?
• Escalatable costs are designed to recover increases in which type of expenses?
• In a modified gross lease, cost increases can be calculated using which methods?
• Fixed costs are best described as:
• If a department uses cash-basis accounting for income statements, what minimum period should each expense category cover?
• Which term best describes the expenses that can be recaptured and include real property and operating costs, CAM charges, and electricity?
• Which source is reasonable for estimating next year's utility costs?
• The rent roll serves as a quick reference for which information?
• What is the purpose of a payment register at commercial properties?
• In rent roll terminology, which statement is true about new leases not yet captured?
• Which accounting bases can be used to record financial transactions?
• Which term is the common set of accounting principles used in the United States?
• Which statement describes going concern concept?
• Which current ratio is commonly used as a benchmark for debt-paying ability, subject to adjustments?
• What is the purpose of matching an invoice to a purchase order during processing?
• Which procedure should be put in place for recording expenses associated with supplies purchased?
• When reviewing past budgets, how many years back should Phil consider?
• Which statement correctly describes the flow of a purchase order?
• Which report lists all current tenants in a building and includes both financial and physical information?
• What is the primary function of a purchase order?
• What is slippage?
• Which budgeting method requires justification for every expense starting from zero base?
• In the Best Properties scenario, which statement best describes how income is generated?
• Which statistic is less affected by extreme values, making it useful for benchmarking data that may have outliers?
• If we operate in many countries, which accounting framework should we use?
• Which statement about semi-variable costs is true?
• In a cash-based reporting framework, which items appear on the income statement?