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BOMI- Budgeting and Accounting Exam
Questions And Answers 100% Pass
Which key components make up the bookkeeping process? (2) - Answer✔recording and
classifying transactions is known as bookkeeping.
Describe the roles filled by a accountant (3) - Answer✔Accounting is a system of summarizing,
interpreting, and communicating financial data.
What are the primary functions associated with accounting ? (4) - Answer✔Accounting is the
next step in the process. Accounting is the system of summarizing, interpreting, and
communicating financial data.
Specify functions incorporated in the budgeting process. (4) - Answer✔Budgeting is the ongoing
process of coordinating resources and expenditures. Through this process, a plan is created with
research and data as the foundation.
The budget reflects the priorities of the business and the resources needed to accomplish them. -
Answer✔
Describe the accounting cycle types most common to commercial real estate management
business (5) - Answer✔revenue cycle and the expenditure cycle
What are the three summary account types ? (9) - Answer✔assets, liabilities, and owner's
equity—with each other as they increase and decrease with debits and credits.
On the balance sheet, assets, liabilities, and owner's equity show the current status of the finances
of the business or the building. - Answer✔
How are debits and credits applied to fundamental accounting equation ? (11-12) -
Answer✔liabilities and owner's equity normally have a credit balance
a credit entry will increase the liability or owner's equity and a debit entry will decrease the
liability or owner's equity
assets -normally have a debit balance, a debit entry will increase the value of an asset, a credit
entry will decrease the value of an asset - Answer✔
explain the relationship between the balance sheets and summary accounts (15) - Answer✔The
balance sheet is literally a statement of the balances, or amounts, within all of the assets,
liabilities, and owner's equity summary accounts of the business.
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what are the generally accepted accounting principles ? (GAAP) (19) - Answer✔Generally
accepted accounting principles (GAAP) are a common set of accounting principles, standards,
and procedures that companies use to record accounting data and compile their financial
statements.
GAAP is a combination of authoritative standards (set by policy boards), as well as commonly
accepted ways of recording and reporting accounting information. - Answer✔These standards
are codified by the Financial Accounting Standards Board (FASB).
What are international accounting standards ?(19) - Answer✔Standards established and
maintained by the International Accounting Standards Board, that are used by multi national
companies
What are internal reporting needs common to the real property industry?(20) - Answer✔property
industry internal reporting includes , tenant collections, vendor payments, and monthly operating
results.
Describe standard financial statements that businesses use? (20) - Answer✔These financial
statements consist of an income statements, a balance sheet, and a statement of cash flows.The
income statement shows revenues earned and expenses incurred in earning those revenues,
resulting in net income or net loss for the period.
What are common accounting methods used for recording financial transactions ? (21) -
Answer✔Accounting and financial reports can be prepared on a cash, accrual, or modified
accrual (also known as hybrid) accounting basis.
When the cash method is used, income and expenses are recorded only when they are received or
paid out. This form of accounting is the most basic and has a cote focus on the actual timing of
both cash received and cash dispersed. - Answer✔
Explain accounting control strategies as they are used in real estate. (22) - Answer✔control
strategies place to detect fraud or theft but are primarily put in place to avoid human error.
strategies to avoid missed cash collection, or conversely excessive outflows that deplete an
owners cash. These include, collections, costs controls
Scenario - Chapter 1. Harold, an experienced finances manager for Beach Properties, hired Janet
and is reviewing the various aspects of budgeting and accounting that she will need to
understand and perform. - Answer✔Although she majored in finance at the local college, she
lacks real world experience. As Harold works with her over the next few weeks, he will seek to
gauge her level of understanding of budgeting and accounting fundamentals.
He will also have her perform some basic tasks. To the degree that she succeeds, she will move
on to more important and complicated projects. To the degree that she fails, Harold will provide
additional training and support. - Answer✔
"Janet, your main job function for the next few months will be to record and classify
transactions" says Harold. "In other words, you will be performing the process of..Blank..
a. accounting b. bookkeeping
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c. budgeting d. financing - Answer✔b. bookkeeping
To the degree you are able to assume the role of accountant, Harold informs Janet, you'll engage
in many more functions. However you will not be responsible for ....Blank ... Financial data -
Answer✔B. memorizing
If Janet performs an accounting function, she will.. blank...financial data.
a. classify
b. identify
c. interpret
d. record - Answer✔c. interpret
remember Janet, that when we create our budget, we make a plan for the financing expenditures
in the ...Blank..., says Harold - Answer✔d. next year
At lunch, Janet tells a friend that some of the job functions she will be performing include
acquiring property, paying for it, and reporting on what is acquired and paid for. "Oh," her friend
correctly notes, "then you'll be involved in the....BLANK..cycle of accounting."
a. asset
b. control
c. revenue
d. expenditure - Answer✔d. expenditure
When Janet "balances the books" (or the summary accounts), she will basically be dealing with:
a. assets, liabilities, and owner's equity.
b. tax planning, revenues, and liabilities.
c. liabilities, budgets, and owner's equity.
d. owner's equity, capital, and tax planning. - Answer✔a. assets, liabilities, and owner's equity
Janet," asks Harold, "if the company takes out a loan to make capital purchases, how would you
record this?" To be correct, Janet should record the money received as a________in Assets and
as a__ in Liabilities.
a. debit; debit
b. debit; credit
c. credit; debit
d. credit; credit - Answer✔b. debit; credit
Day after day, Janet records debits and credits for each entry to the balance sheet. This pro-
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cess is referred to as accounting.
a. single-pass
b. double-pass
c. single-entry
d. double-entry - Answer✔d. double-entry
The common set of accounting principles, standards, and procedures that Janet uses to record
accounting data and compile the company's financial statements is known as:
a. ASC.
b. GAAP.
c. IFRS.
d. SPF. - Answer✔b. GAAP.
If we grow to the point where we become a large multinational company doing busi¬ness in
many countries, what set of accounting principles, standards, and procedures will we use?" asks
Janet. "Well then," Harold responds, "in that case, we'll have to use the
a. ASC
b. GAAP
c. IFRS
d. SPF - Answer✔c. IFRS
Over coffee, Harold correctly informs Janet that a .Blank...building-by-building comparison of
actual operating income and expenses against the budget is used to deter¬mine the success of the
property manager in meeting operating plans.
a. daily
b. weekly
c. monthly
d. yearly - Answer✔c. monthly
Janet, if I want to know what monies have been earned, but not yet received, by the company,
what standard financial statement would I consult?" Janet responds quickly and
accurately, "You would want to examine the statement."
a. income
b. cash flow
c. accounts payable
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