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Which key components make up the bookkeeping process? (2) - ansrecording and classifying transactions is known as bookkeeping. Describe the roles filled by a accountant (3) - ansAccounting is a system of summarizing, interpreting, and communicating financial data. What are the primary functions associated with accounting? (4) - ansAccounting 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) - ansBudgeting 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. - ans Describe the accounting cycle types most common to commercial real estate management business (5) - ansrevenue cycle and the expenditure cycle What are the three summary account types? (9) - ansassets, 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. - ans How are debits and credits applied to fundamental accounting equation? (11-12) - ansliabilities 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 - ans explain the relationship between the balance sheets and summary accounts (15) - ansThe 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) - ansGenerally 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. - ansThese standards are codified by the Financial Accounting Standards Board (FASB). What are international accounting standards ?(19) - ansStandards 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) - ansproperty industry internal reporting includes , tenant collections, vendor payments, and monthly operating results. Describe standard financial statements that businesses use? (20) - ansThese 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.
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What are common accounting methods used for recording financial transactions? (21) - ansAccounting 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. - ans Explain accounting control strategies as they are used in real estate. (22) - anscontrol 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. - ansAlthough 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. - ans "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 c. budgeting d. financing - ansb. 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 - ansB. memorizing If Janet performs an accounting function, she will.. blank...financial data. a. classify b. identify c. interpret d. record - ansc. interpret remember Janet, that when we create our budget, we make a plan for the financing expenditures in the ...Blank..., says Harold - ansd. 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 - ansd. 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.
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b. cash c. modified accrual d. modified cash - ansb. 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: - ansa. 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. - ans Chapter 2 - ansChapter 2 In what practical ways do building professionals use records? ( 2-3_) - ansaccurate 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) - ansprocedures 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) - ansthe 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) - ans1. 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.
- centralize purchasing to enable analysis for preferred supplies or negotiated preferred rates.
- consolidate orders and discounts. 7. validate accounts 8. record accumulation of inventory
- ans What items are included in the tenant file? (11) - ansthe 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) - anstickler 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) - ansVacancy, delinquency and rent roll are all import reports that help building professionals make decisions What is the purpose of the audit trail? (16) - ansis to leave a record that auditors can verify What specific information do these reports provide to decision makers? (15-16) - ansinformation 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
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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, - ansand 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. Zelda calls her staff together for their first meeting. She correctly emphasizes that, first and foremost,..blank.. is what creates the foundation for sound decision making based on information, proper year-end reconciliations, and for compliance with tax and legal requirements. - ansa. accurate record keeping b. education in finance c. managerial guidance d. team dedication a. accurate record keeping - ans The controls that Zelda is implementing for the administration of accounts payable and receivable are both necessary and proper. She knows that the individuals who authorize payments..blank.. be the same people who issue the checks. - ansa. should always b. should usually c. should rarely d. should not d. should not - ans The personnel in Zelda's new finance office do not really understand the advantages' of using purchase orders. These advantages include clearly outlining the goods being provided, outlining the general terms and conditions of the purchase, and: - ansa. opening up access to many individuals. b. consolidating orders and discounts. c. decentralizing purchasing. d. the ability to legally enforce the terms. b. consolidating orders and discounts. - ans Why is there a good need for lease interpretation? - ansso that the tenant fully understands their responsibilities to the landlord and to avoid any misunderstandings, financial or other
. If Zelda uses the BOMA Chart of Accounts, she should understand that the level that reflects the functional categories of building operations is the ..blank..level. - ansa. first b. second c. third d. fourth a. first - ans Bob, who works in the finance office, is reviewing the tenant files to see what they contain. While he expects the files to contain copies of leases and commencement letters, he asks Zelda if the files should contain floor plans, as well as information on keys and locks. Zelda's correct response would be: - anskeys and locks. Zelda's correct response would be: a. no to both. b. no to the first, but yes to the second. c. yes to the first, but no to the second.
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delay of possession , rent amount, requirements for payment, late charges, additional rent, security deposit, subleasing and excess rent, continous operations, holdover, option to renew why is lessee documentation important? - ansbecause it clearly entails all the details who payment information and the details of all parties involved What are tenant and property reports commonly created with information contained in lease abstract - ansrent roll, stacking plan, tenant profile, reminder notices, stopped rent report and lease expiration report hand directly from the lease document to a form that is used as a file copy the third way entails working directly with the property tenant database. the lease is abstracted by filling in predetermined fields - ans Scenario - Chapter 3. If Miguel has learned anything over the many years he has managed properties, it's the following: Whenever there's a problem or a tenant complaint, always go to the lease document. Tenants at his office building sometimes assume, and expect, - ansservices either not mentioned in the lease or specified differently in that document. While he is patient and willing to work with tenants, he relies on the exact wording of the lease document. In essence, this provides security for both lessors and lessees. He's not suspicious by nature, but he knows that if he bypasses the lease agreement for one tenant, soon all tenants will expect the same treatment. - ansTo avoid difficulties, he works carefully with all parties before the lease is signed to ensure that everyone is satisfied and understands his or her respective rights and obligations. Regardless of the amount of experience Miguel might have, the law assumes that as a prop- erty manager, he is a..BLANK..and is therefore held to a standard ..BLANK.. than the building's tenants. - ansa. knowledgeable party; lower b. knowledgeable party; higher c. non-knowledgeable party; lower d. non-knowledgeable party; higher b. knowledgeable party; higher - ans As he has worked with tenants (both current and prospective) over the years, Miguel continually reminds them of the main function of a lease. The lease's main function is to protect the interests of the: - ansa. bank and the landlord. b. landlord and the tenant. c. government and the bank. d. tenant and the government. b. landlord and the tenant. - ans One prospective tenant is starting a new business and does not anticipate much cash flow in the first few years. As a result, the tenant requests the type of lease that ensures the land- lord pays for all expenses of property operations. - ansThis tenant wants a ..blank..lease. a. net b. gross c. seminet d. semigross b. gross - ans Miguel reviews the proposed lease of another prospective tenant who will pay base rent to the landlord, as well as property operating expenses incurred by the landlord. However, the
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tenant will pay separately for property taxes. - ansThis best describes a(n) ..blank..lease. a. single-net b. double-net c. triple-net d. absolute net a. single-net - ans Miguel has a tenant who paid rent three days after the due date. To determine whether or not additional charges should be assessed against this tenant because of his tardiness, which of the following common significant lease clauses should - ansMiguel consult? a. holdover b. option to renew c. late charges d. security deposit c. late charges - ans What are examples of common billable expenses on a lease? (pages 4 - 5 to 4-8) - ansreal property taxes, operating expenses, common area maintenance charges, electricity, A prospective tenant for the vacant third floor office space in Miguel's building is a branch location of a national chain of insurance agencies. Since Miguel is unclear if the corporate office for the chain will pay rent or the branch leadership, - ansit will be necessary to__ the name of the lessee if the prospective tenant elects to rent in the building. a. omit b. document c. remove d. ignore b. document - ans A new tenant to the building Miguel manages decided to install new carpeting in the suite it will soon occupy. The tenant is responsible for overseeing and financing the carpet installation, which has fallen behind schedule and delayed the date when the tenant planned to move into the suite. - ansWhich 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? a. customary and additional services b. delay of possession c. rent amount d. subleasing and excess rent b. delay of possession - ans Miguel is changing the way the lease abstracts will be written so that they follow proper and common practice. In its simplest form, a lease abstract is an overview of the most frequently ..blank..items in a lease - ansa. litigated b. negotiated c.referenced d. taxed c. referenced - ans
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operation, some - ansleases provide for a set dollar amount to be established as the base amount. This amount is also called an expense stop. In each case, tenants pay only their portion (called the pro rata share) of the incremental increase over the base amount. What are the best practices for communicating charges to tenants? - ansthe building professional must provide the tenant as much information with a explanation to ensure they understand. transparency is key in communicating charges to tenants Scenario - Chapter 4. Given that the ultimate goal of any property owner is creating net operating income (NOI), Carmichael Properties has not been doing well. While the properties they own are in good condition, are situated in desirable locations, - ansand are highly valued, they nevertheless fail to deliver a decent NOI. Ownership is hoping that the hiring of Natalie as property manager can help turn the situation around.. Expectations are high as she has a good track record of increasing profitability no matter how well or poorly a property might be performing. - ansShe immediately begins her examination of the various income streams to understand what is working and what is not The first thing Natalie does is to examine the two main categories of rent for Carmichael's properties. The two categories are base rent and rent. - ansa. additional b. auxiliary c. taxable d. nontaxable a. additional - ans Although it has not proven to be a problem, Natalie reminds her colleagues that, from a legal perspective,..blank.. income received by the owner of a property is considered to be rent. - ansa. all b. most c. some d. no a. all - ans Among the ..blank..expenses that Natalie can look to for recapturing purposes are real property and operating expenses, common area maintenance charges, and electricity. - ansa. unusual billable b. unusual nonbillable c. common billable d. common nonbillable c. common billable - ans Instead of using the operating costs from a base year of operation to assess modified gross lease rent increases, Carmichael Properties uses the expense stop method. This is a somewhat confusing method, and Carmichael and its tenants experience this confusion. - ansHowever, in spite of what people may believe, the rule is that when the expense stop is reached, the owner ..blank..paying and the tenant ..blank..paying. a. begins; begins b. begins; stops c. stops; begins d. stops; stops c. stops; begins - ans
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In order to calculate each tenant's share of the property cost increases, Natalie would..Blank.. by the tenant's pro rata share. - ansa. divide the escalatable cost pool b. divide the net cost increase c. multiply the escalatable cost pool d. multiply the net cost increase d. multiply the net cost increase - ans Natalie is concerned by how the various expenses have been categorized in Carmichael's books. Those expenses that are unrelated to the management, maintenance, and repair of the building should be classified as ..blank..expenses. - ansa. direct b. indirect c. recoverable d. nonrecoverable d. nonrecoverable - ans Natalie is also concerned that the members of her department do not seem to understand that cash basis income statements do not conform to GAAP requirements. However, even if the department opts to use cash basis—as opposed to accrual basis—for its income statements, the key is to review the expense accounts to ensure that each category contains a full..blank..of activity. - ansa. six months b. 12 months c. two years d. four years b. 12 months - ans Natalie is dissatisfied with the kind of lease Carmichael Properties employs with the tenants of the retail mall it owns. Since Carmichael incurs the costs of advertising and special promotions to make the mall attractive to consumers, - ansNatalie wants Carmichael to take advantage of ..blank..clauses, which will allow Carmichael to recover these expenses and risks by participating in the success of the retail tenants. a. negotiated rent b. percentage rent c. negotiated pass-through d. percentage pass-through - ansb. percentage rent To ensure that Carmichael Properties receives the value of a dollar of rent adjusted for inflation, base rent is increased annually based on increases in the CPI. Increases are determined by comparing the..blank..CPI to the base CPI. - ansa. anniversary b. averaged c. expected d. traditional a. anniversary - ans Natalie insists on adherence to best practice in communicating changes in monthly estimates for the expense portions of leases. The best practice is to calculate and communicate such changes to tenants by___ to become effective with the monthly rent for January. - ansa. early October b. late October c. early December
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month's rent is often prorated. Unfortunately, Elvin learns, the leases signed by - ansboth tenants and the landlord do not contain a(n) ..blank.letter, which specifies the exact date of the lease commencement and expiration. a. adjustment b. commencement c. finalization d. habitation b. commencement - ans In discussions with his office's personnel, Elvin discovers that they have never used...blank.. rent to their advantage. This type of rent typically offers rents that are below-market; but rise over the life of the lease. - ansa. aggregated b. benchmarked c. cascaded d. stepped d. stepped - ans Elvin explains to his colleagues that with rent abatements, the rent periods are often...blank... the terms of the lease. Also, the rents may apply to ..blank..only. - ansa. added to; base rent b. added to; additional rent c. subtracted from; base rent d. subtracted from; additional rent a. added to; base rent - ans Unfortunately, the owners of Ideal Towers have not been charging all the rent that they are entitled to charge. For example, they could pass on the costs associated with operating expenses, real estate taxes, and common area maintenance. - ansThese charges would be considered..BLANK.. rent. a. additional b. base c. categorical d. defined a. additional - ans The landlords at Ideal Towers sometimes have to charge holdover rent. For such a tenant, whose base rent is $25,000 per month, the landlords apply a holdover rate of 1.25. - ansThis means that the holdover tenant should pay..blank.. per month. a. $20, b. $31, c. $56, d. $62, b. $31,250 - ans While recurring monthly charges are copied from the tenant database to the cash receipts journal, ..blank..are entered directly into the cash receipts journal in the month they occur. - ansa. one-time tenant charges b. Elvin's personal office supply orders c. elevator maintenance fees d. Ideal Towers' leasing brokerage fees
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a. one-time tenant charges - ans The finance office personnel were confused about the nature and obligations of lease reminder notices. Elvin informs them that a lease..blank.. a legally binding contract that ..blank..obligate the landlord to provide the tenant such notice. - ansa. is; does b. is; does not c. is not; does d. is not; does not b. is; does not - ans what are the stages of budgeting base rent? - ans1. schedule base rent monthly for each existing tenant
- increase base rents for future stepped rent increases Ideal Towers has had its share of delinquent tenants. Elvin takes steps to ensure that his office will follow generally accepted practice regarding tenant receivables. - ansThis means that monthly reminders will be delivered to tenants on or before the..blank.. of the month preceding the due date. a. 1st b. 10th c. 17th d. 25th d. 25th - ans Elvin ensures that the collections and charges they receive are properly classified. This means that he, as property manager, and the accounting staff should assign a..blank..to each category of income they collect or charge. - ansa. cell slot b. transaction code c. specification number d. chart of accounts code d. chart of accounts code - ans Chapter 6 - ansChapter 6 What is meant by the term responsibility budgeting? - ansthe preparation of a portion of the budget along with the explanation for any budget variances, by the individual or individuals responsible for that portion of the budget What are the common elements of the rent roll that need to be updated? - ans1. new leases not yet abstracted
- commencement letters, extensions, expansions, and other changes to space requirements
- amendments, addenda items, and other changes to terms of existing leases Explain the process that owners use to classify income? - ansCash received or amounts charged are recorded as income on the financial statements, and the amount associated with each code are then transferred to the general ledger, as the current outstanding balance.
- identify a success ratio in obtaining renewals for lease expiring during the year - ans4. quantify leasing efforts needed to market vacant space when the next accounting period is opened, the current outstanding balance is transferred to the prior month - ans
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d. quantifying leasing efforts needed to market vacant space. a. scheduling base rent monthly for each existing tenant. - ans In scheduling tenant base rent, Sheila is best advised to use a base rent worksheet with a complete listing of the tenants and: - ansa. nothing else. b. the suite numbers only c. the suite numbers and square footage. d. the suite numbers, square footage, and interior design specifics. c. the suite numbers and square footage. - ans In her budget projections, Sheila typically enjoys high success ratio in the range of 90 to 95 percent. This is because she combines market conditions with: - ansa. owner objectives and internal improvements. b. owner objectives and an assessment of past performance. c. internal improvements and an assessment of past performance. d. internal improvements, an assessment of past performance, and owner objective - ansb. owner objectives and an assessment of past performance.
. Sheila works hard to ensure that spaces are vacant for as little time as possible. She also makes sure that the expense caps written into the leases are generally higher than what the tenants may prefer. Both of these efforts help to lessen the difference - ansbetween recoverable operating expenses and actual operating expenses. This difference is known as: a. attenuation. b. drawdown. c. liability. d. slippage. d. slippage. - ans Other sources of income do not escape Sheila's notice. These other sources, such as parking, storage, and rooftop solar panels, require a(n) schedule to show additional rent charges. - ansa. annual floor-by-floor b. annual tenant-by-tenant c. monthly floor-by-floor d. monthly tenant-by-tenant d. monthly tenant-by-tenant - ans According to generally accepted procedure, Sheila should communicate budget variances on a(n) basis in the variance analysis. - ansa. weekly b. monthly c. semi-annual d. annual b. monthly - ans Chapter 7 - ansChapter 7 What are the components commonly tracked in a vendor data base? - ansvendors legal name, remittance address, federal tax I.D number, minority status and entity type. a unique number is then assigned to each vendor When developing an RFP, which requirements should be kept in mind to ensure the most useful information is obtained from potential vendors - ansshould be as specific and detailed
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as possible in outlining the requirement and open ended questions may be valuable, but a baseline will be needed to enable objective comparison of vendor proposals Which elements should be considered when comparing vendors? - ansquality of team, background, stature, experience, demonstrated experience in relationship to project, evidence of innovation, track record, quality of response , pricing model she nevertheless adheres to best practices and follows the specific details written into leases. - ansAs well as dealing with tenants, so also she deals with budgets. She follows legal requirements and best practices in order to avoid errors and ensure maximized income stream What are the functions of a purchase order? - ansprovides assurance to the vendor and the purchasing entity that the expenditure has been approved by a authorized individual What standards should be put in place when processing invoices? - ansthey should be received, date stamped and matched with the appropriate P.O. and discrepancies between P.O price and invoice price should be resolved before invoice is processed. originals should be used where possible for payment Why is invoice coding needed? - ansto ensure that the wrong contractor isn't being paid out of the wrong account or for the wrong service How is the unpaid invoice report used? - ansare used to determine invoices that are waiting for payment. the report is generated out of the holding file, where the un paided invoices are kept until they are paid and then removed What elements are often seen on the payroll register? - ans1. F.U.T.A - percentage of gross wages set by federal government
- S.U.T.A - percentage of gross wages set by each state government
- employers F.I.C.A - percentage gross wages set by the federal government - ans4. Workers compensation and health insurance , based on insurance rates provided by employers insurance carrier Scenario- Chapter 7 - City Medical Complex offers basic healthcare services to the public and also leases space to medical researchers. Kevin is the property manager of City Medical Complex. - ansWhile the hospital's senior management is concerned with the rising costs of healthcare, Kevin is concerned only with the efficient and thrifty operation of the building. He is presently examining expenditures associated with the operation of the complex. He seeks to minimize expenses and maximize the benefit realized from purchases for equipment, products, and services. He believes that he can more easily bring the budget into balance by keeping a watchful eye on expenditures. - ansSenior management is encouraged by these efforts and they eagerly anticipate his upcoming progress report . While Kevin is satisfied with the quality of the service provided by the cleaning ven-dors, he is concerned about the cost. He therefore is going to submit RFPs to various cleaning vendors. It is generally recommended that RFPs be delivered to no more than - ansvendors to ensure proper consideration. a. one or two b. three to five c. six to eight d. nine to 12 b. three to five - ans
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b. gross wages - ans Chapter 8 - ansChapter 8 What are the three cost types? - ansfixed costs, variable costs and semi variable costs what is a fixed cost? - anscost types that don't change. for example, a mortgage payment What is a variable cost? - anscosts that vary from month to month, like utilities What are semi variable costs? - anscosts that have both fixed and variable costs attached to them. landscaping and ground maintenance fees is a common semi variable cost. seasonally they vary What causing cost variation? - ansthe most typical factor causing cost variation is occupancy. cleaning , maintenance and utility costs all vary when occupancy changes What are typical uses for pro forma? - ansis a projection of operating expenses over a anticipating holding and most often used for a potential investor to determine if the asset in question will generate sufficient yields if purchased When looking to revise a budget, which items should owners and building management consider? - ansshould look to revise capital budget expenditures, but often they look towards day to day operating budgets What recourse do owners have when they are made aware of the budget variance? - ansmost have alternative investment strategies that can be implemented at the first sign of trouble. the goal of both owner and property manger is to increase value of the property so all variances should be communicated immediately Explain the tracking procedures commonly used when dealing with purchase orders - ansin a typical flow of a P.O, one copy goes to the vendor, one to the building,(receiving copy) one to the accounting department(the control copy) and a numerically filed copy is sent to the property or facilities manager a P.O log is then created and lists the most pertinent information on the P.O and P.O's are periodically updated as the order is completed - ansthe P.O log is used for researching vendor payment requests and helps with preparing on going budget revisions How are the invoice approval levels determined? - ansmost often based on amount of the invoice. the higher the cost of something, the higher the level of approval What are the common categories into which costs are segregated for accounting - ans1. cleaning costs
- Administrative costs. 3 real estate taxes. 4. Building insurance Scenario - 8. Best Properties wants to get control over the high costs associated with its shopping mall, so the company convinces Rudy, through incentives and a high salary, to become the property manager. - ansRudy has a reputation for getting things organized and finding ways to minimize costs while keep things running smoothly. The mall situation is unique to him because it is located in a more upscale suburban neighborhood than he is accustomed to, has many big-name stores, and the property is perceived as very pleasant . Since he's new on the job, Rudy plans to meet his new col-leagues and walk around to see for himself how things are routinely done. - ansAdditionally, he's going to ask his new fellow employees what their perceptions are about a number of matters. He will then develop his strategy for prioritizing problems to solve and corrections to make.
- Rudy meets with the finance office staff to learn the various costs of operating the mall.
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He categorizes all the costs into their appropriate categories. Costs such as grounds maintenance are properly categorized as costs. - ansa. fixed b. semi-fixed c. variable d. semi-variable d. semi-variable - ans As Rudy meets with the mall staff, he hears many opinions about the "real" reason building costs vary. Of course, he already knows that the most typical factor affecting variation in building costs is: - ansa. inflation. b. occupancy. c. building usage. d. government regulation. b. occupancy. - ans Best Properties would have used a as a projection of the expenses of the property over time, and it would continue to monitor the operation of the property to ensure that - ansthe projections made during investment analysis are met or exceeded. a. survey b. pro forma c. title search d. two-step mortgage b. pro forma - ans The owners of Best Properties have to revise the operating budget of the mall; that is, they are considering cuts that will enhance the financial performance of the mall. Cutting only proposed capital expenditures that are not immediately - ansneeded for effective operation, safety, and the value of the property is generally considered to be: a. ideal. b, illegal. c. necessary. d. dangerous. a. ideal. - ans The mall owners and Rudy have come to an agreement about the expense budget for the coming year. Should Rudy see a material variance from the budget, he will inform the owners early so that they may: - ansa. defer paying bills. b. raise tenant rent in the coming year. c. review the variance with Rudy to put alternative strategies in place. d. quickly sell the property. c. review the variance with Rudy to put alternative strategies in place. - ans Noreen, a member of the finance office staff, brings Rudy the PO log. This log is a numerical listing of all purchase orders: - ansa. accepted. b. completed. c. issued. d. paid. c. issued. - ans
