BOMI Budgeting and Accounting Practice Exam

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