Exam (elaborations)
BOMI- BUDGETING AND ACCOUNTING
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BOMI- BUDGETING AND ACCOUNTING
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BOMI- BUDGETING AND ACCOUNTINGWhich key components make up the bookkeeping process? (2) - Answers -recording
and classifying transactions is known as bookkeeping.
Describe the roles filled by a accountant (3) - Answers -Accounting is a system of
summarizing, interpreting, and communicating financial data.
What are the primary functions associated with accounting ? (4) - Answers -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) - Answers -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. - Answers -
Describe the accounting cycle types most common to commercial real estate
management business (5) - Answers -revenue cycle and the expenditure cycle
What are the three summary account types ? (9) - Answers -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. - Answers -
How are debits and credits applied to fundamental accounting equation ? (11-12) -
Answers -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
Day after day, Janet records debits and credits for each entry to the balance sheet. This
pro-
cess is referred to as accounting.
a. single-pass
b. double-pass
c. single-entry
d. double-entry - Answers -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. - Answers -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 - Answers -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 - Answers -c. monthly
Janet, if I want to know what monies have been earned, but not yet received, by the
company, what standard financial statement would I consult?" Janet responds quickly
and
accurately, "You would want to examine the statement."
a. income
b. cash flow
c. accounts payable
d. accounts receivable - Answers -d. accounts receivable
For now, Harold has Janet prepare financial reports on a(n) basis, as it is the most basic
method.
a. accrual
b. cash
c. modified accrual
d. modified cash - Answers -b. cash
Harold will soon be introducing Janet to accounting, or internal, controls that maximize
cash income and minimize cash outflows. In particular, she will have to learn how to
help the company avoid the most common error in properly administering tenant leases,
which is: - Answers -a. offering lease rates at below-market value.
b. not using smartphone apps for lease payments.
c. overlooking charges that are properly billable to the tenant.
d. delaying the filing of annual forms with the proper governmental authorities.
c. overlooking charges that are properly billable to the tenant. - Answers -
Chapter 2 - Answers -Chapter 2
,In what practical ways do building professionals use records ? ( 2-3_) - Answers -
accurate data is what allows stakeholders to take raw data and convert it into useful
information from which final decisions can be made. these records are required for
compliance with tax and legal requirements
Explain the practice of checks and balances . (4) - Answers -procedures put in place to
ensure to different individuals perform different roles and functions help ensure checks
and balances. those who authorize payments, should not be the same people who
issue checks or mail them
Describe the purpose of a chart of accounts , as well as its components . (8-9) -
Answers -the chart of accounts is the list of line items or categories that classifies
accounts. charts of accounts are customized to fit the purposes of the business , and
accounts are listed by function
What are the advantages to using a purchase order? (7) - Answers -1. clearly outline
good and services being provided. 2. outline the general terms of conditions of the
purchase. 3.track purchases in chronological order. 4. limit access.
5. centralize purchasing to enable analysis for preferred supplies or negotiated
preferred rates. 6. consolidate orders and discounts. 7. validate accounts 8. record
accumulation of inventory - Answers -
What items are included in the tenant file? (11) - Answers -the tenant file houses the
most current correspondence, leases and other documents. a copy of the lease , lease
abstract, rent roll, lease amendments, floor plans, keying information, security deposits,
insurance information or anything related to the tenant
which elements are typically tracked with the use of a tickler system (14) - Answers -
tickler system is a system that reminds them of important deadlines and filing dates.
Lease changes, billing info, dues dates, corporate reporting dates , accounting cutoff
dates all maybe monitored by tickler system
identify reports common in the commercial real estate industry that aid building
professionals in making decisions about use of space, funds, and interactions with
tenants (15-16) - Answers -Vacancy, delinquency and rent roll are all import reports that
help building professionals make decisions
What is the purpose of the audit trail ? (16) - Answers -is to leave a record that auditors
can verify
What specific information do these reports provide to decision makers ? (15-16) -
Answers -information about available funds, vacant space , churn rate, information for
new tenants, potential tenants and effects on operating budgets due to a increase or
loss of rent
, Scenario - Chapter 2 . Having been audited in the past, Clarkson Real Estate does not
want to repeat that experience. Senior management decides to hire an experienced
finance manager to clean up operations, require and maintain proper record-keeping
procedures, - Answers -and ensure full compliance with laws and GAAP. Zelda has
enjoyed the reputation of being such a person. Clarkson was able to hire her by making
her a generous offer. She has accepted and looks forward to bringing everything up to
standard.
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 - Answers -
explain the relationship between the balance sheets and summary accounts (15) -
Answers -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.
what are the generally accepted accounting principles ? (GAAP) (19) - Answers -
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. - Answers
-These standards are codified by the Financial Accounting Standards Board (FASB).
What are international accounting standards ?(19) - Answers -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) - Answers
-property industry internal reporting includes , tenant collections, vendor payments, and
monthly operating results.
Describe standard financial statements that businesses use? (20) - Answers -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) -
Answers -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. - Answers -
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