BOMI Budgeting and Accounting Practice Exam

These questions are part of the practice quiz. Start practicing

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