Basic Accounting Flashcards
1
Q
What are three important distinctions made in accounting?
A
Income and disbursements, assets and liabilities, receivables and payables
2
Q
What is the purpose of a chart of accounts?
A
Organizing how a business handles money as it comes in and goes out
3
Q
What are purchase orders used for in businesses?
A
Monitoring expenses
4
Q
Why is accounting and bookkeeping important to business management? Give several reasons.
A
Practical reasons include financial decision making, tracking expenses, managing cash flow, and ensuring compliance
5
Q
Fill in the blank: Money flows out of a business through _______.
A
accounts payable
6
Q
What are the steps in making a purchase-order system work?
A
Identify needs, create order, approve order, receive goods, pay invoice
7
Q
Distinguish between assets and liabilities.
A
Assets are resources owned by a business; liabilities are obligations owed by a business
8
Q
What are the purposes and uses of the general ledger?
A
Recording all financial transactions, summarizing accounts, and providing financial statements
9
Q
Give examples of ways site managers contribute to the financial health of properties they manage.
A
Budgeting, monitoring expenses, optimizing revenue, and maintaining accurate financial records
10
Q
Who were the leaders in refining bookkeeping before the 1400s?
A
The Venetians
The Venetians were known for their advanced financial practices and understanding of money management.
11
Q
What was a common practice among many merchants before the 1400s regarding their financial records?
A
Many merchants never balanced their books and some did not even keep books
This reflects a lack of formal financial management among less serious merchants.
12
Q
What major financial divisions were created to help manage a business?
A
Income and disbursements, profit and loss, red ink and black ink
These divisions helped merchants better understand their financial status.
13
Q
Who published the rules for double-entry bookkeeping in 1494?
A
Fra Luca Pacioli
His publication was significant in organizing financial records.
14
Q
What is double-entry bookkeeping?
A
A method for separating and organizing cash inflows, cash outflows, accounts payable, and accounts receivable
This system helps track financial transactions accurately.
15
Q
What was the name of Fra Luca Pacioli’s large book about mathematics?
A
The Summa
This book included his rules for bookkeeping and had a lasting impact on business practices.
16
Q
What was the impact of Fra Luca Pacioli’s teachings on business practices?
A
His book had a tremendous impact on business practices
It standardized accounting methods and improved financial management.
17
Q
According to Alfred W. Crosby, what is the effect of frequent accounting?
A
It makes for lasting friendships
Good bookkeeping fosters trust and reliability in business relationships.
18
Q
Fill in the blank: Good bookkeeping allows the merchant to discern _______.
A
profits and losses
This understanding is crucial for effective business management.
19
Q
True or False: Before the 1400s, all merchants kept detailed financial records.
A
False
Many merchants did not keep books or balance their accounts.
20
Q
What is the importance of controlling finances in management?
A
It is vital for maintaining good partnerships and working relationships among employees, owners, and managers.
Frequent financial reporting builds trust in business relationships.
21
Q
What can learning an organization’s profits and losses improve?
A
Management decision making about day-to-day challenges.
Understanding financial performance leads to better operational decisions.
22
Q
How does understanding financial concepts benefit a company?
A
It leads to better forecasting, planning, and decisions about future opportunities.
Financial literacy is crucial for strategic planning.
23
Q
Who is Fra Luca Pacioli?
A
An influential figure in the history of bookkeeping and accounting.
He is often referred to as the ‘father of accounting.’
24
Q
What is cash?
A
Money in the form of banknotes, coins, or negotiable paper, including checks.
Cash is the most liquid form of asset.
25
Define receipts or revenue.
Money coming into a business as cash, yield, tax credits, and other forms of income.
## Footnote
Receipts and revenue are key components of financial reporting.
26
What is an expense?
Money paid out to cover costs or charges.
## Footnote
Expenses can sometimes be divided over multiple accounting periods.
27
What does cost refer to in accounting?
The price of services, raw materials, processes, or components.
## Footnote
Cost accounting examines the inputs of manufacturing processes.
28
What is an asset?
One of a company's economic resources, including property and cash.
## Footnote
Assets are critical for assessing a company's financial health.
29
Define liability.
A creditor's claim on a company; money owed.
## Footnote
Liabilities are essential for understanding a company's financial obligations.
30
Fill in the blank: Frequent _______ makes for lasting friendships.
accounting
## Footnote
This quote emphasizes the importance of regular financial reporting.
31
What are the different kinds of accounting?
Cash basis, Accrual basis, Modified accrual accounting
## Footnote
Each type varies in how revenues and expenses are recorded.
32
In cash basis accounting, when are revenues declared?
When cash is received
## Footnote
Often used in personal tax returns.
33
In cash basis accounting, when are expenses declared?
When cash is paid out
34
What is an example of cash basis accounting?
Personal tax return
## Footnote
Income is reported in the year it is received.
35
In accrual basis accounting, when are revenues declared?
When they are earned
36
In accrual basis accounting, when are expenses declared?
When they are incurred
37
What is an example of accrual basis accounting?
A real-estate firm
## Footnote
Revenues from rentals are declared when earned.
38
What is modified accrual accounting?
A mix of cash basis and accrual basis
## Footnote
Some revenues and expenses are declared on a cash basis while others on an accrual basis.
39
In modified accrual accounting, how are taxes and insurance treated?
As accrual expenses
## Footnote
They are recognized when incurred rather than when paid.
40
Fill in the blank: In cash basis accounting, expenses are declared when cash is _______.
paid out
41
Fill in the blank: In accrual basis accounting, revenues are declared when they are _______.
earned
42
True or False: Accrual basis accounting recognizes revenues when cash is received.
False
43
True or False: Modified accrual accounting uses only cash basis for all revenues and expenses.
False
44
What types of entities commonly use accrual basis accounting?
Midsized and larger corporations
## Footnote
Real-estate firms also typically use this method.
45
What are the different kinds of accounting?
Cash basis, Accrual basis, Modified accrual accounting
## Footnote
Each type varies in how revenues and expenses are recorded.
46
In cash basis accounting, when are revenues declared?
When cash is received
## Footnote
Often used in personal tax returns.
47
In cash basis accounting, when are expenses declared?
When cash is paid out
48
What is an example of cash basis accounting?
Personal tax return
## Footnote
Income is reported in the year it is received.
49
In accrual basis accounting, when are revenues declared?
When they are earned
50
In accrual basis accounting, when are expenses declared?
When they are incurred
51
What is an example of accrual basis accounting?
A real-estate firm
## Footnote
Revenues from rentals are declared when earned.
52
What is modified accrual accounting?
A mix of cash basis and accrual basis
## Footnote
Some revenues and expenses are declared on a cash basis while others on an accrual basis.
53
In modified accrual accounting, how are taxes and insurance treated?
As accrual expenses
## Footnote
They are recognized when incurred rather than when paid.
54
Fill in the blank: In cash basis accounting, expenses are declared when cash is _______.
paid out
55
Fill in the blank: In accrual basis accounting, revenues are declared when they are _______.
earned
56
True or False: Accrual basis accounting recognizes revenues when cash is received.
False
57
True or False: Modified accrual accounting uses only cash basis for all revenues and expenses.
False
58
What types of entities commonly use accrual basis accounting?
Midsized and larger corporations
## Footnote
Real-estate firms also typically use this method.
59
What is accounting primarily concerned with?
Monitoring the flow of income and expenses in a business.
60
What are the two main categories used to clarify money flow in a business?
Debts and credits.
61
What are accounts payable and accounts receivable used for?
To monitor short-term movements in accounts.
62
Define an account in the context of accounting.
A financial category with a defined purpose set up to monitor money transactions.
63
What types of accounts monitor the flow of money into a business?
Revenue accounts and accounts receivable.
64
What types of accounts track the flow of money from a business?
Expenses and accounts payable.
65
Give examples of revenue accounts.
* Rents
* Sales
* Miscellaneous income
66
Give examples of expense accounts.
* Salaries
* Supplies
* Materials
* Utilities
67
What is a chart of accounts?
An organized list of the accounts to which income and expenses will be assigned.
68
How are charts of accounts customized?
To fit the purposes of a business.
69
What determines the kinds of accounts to be set up in a chart of accounts?
The purposes and plans of the business.
70
In a chart of accounts, how are related accounts grouped?
By function.
71
Why would a real-estate management firm include rent as both income and expense?
They have different functions: one is income from tenants and the other is an expense for its own offices.
72
Would a manufacturing firm likely include rent in its chart of accounts? Why or why not?
No, because it owns its own plants and office space.
73
Fill in the blank: A chart of accounts divides accounts into _______ and _______.
income (revenues) and expenses (disbursements).
74
What is the purpose of separate line items in expense accounts?
To track many alternative functions.
75
What are the two main divisions of a chart of accounts in a real-estate management company?
Income (Revenues) and Expenses (Disbursements)
## Footnote
These divisions help in classifying financial transactions accurately.
76
What types of income are included in the Income (Revenues) section of the chart of accounts?
* Office Rental
* Retail store rental
* Garage and parking fees
* Gross potential rental income
* Escalation income
* Pass-through recovery income
* Retail percentage income
* Miscellaneous income
* Gross potential total income
* Vacancies and rent loss
* Effective Gross Income
## Footnote
These categories allow for detailed tracking of income sources.
77
What is an example of a line item under the category of Services in the Expenses (Disbursements) section?
Landscape services
## Footnote
This category includes various services that incur expenses.
78
Name two types of utility expenses listed under the Utilities category.
* Electricity
* Water
## Footnote
Utilities expenses are critical for property management and maintenance.
79
Fill in the blank: Expenses for different kinds of power are categorized under _______.
[Utilities]
## Footnote
This includes various utility-related expenses incurred by the property.
80
What are some examples of maintenance and repair expenses?
* HVAC repairs
* Electrical repairs
* Plumbing repairs
* Elevator repairs/contracts
* Exterior repairs
* Common area repairs
* Roof repairs
* Parking lot repairs
## Footnote
These expenses are essential for maintaining property functionality.
81
True or False: Administrative costs are categorized under Expenses (Disbursements).
True
## Footnote
Administrative costs are a crucial part of managing expenses in real estate.
82
What is the purpose of classifying expenses under various functions?
To provide detailed tracking and management of costs associated with different operations
## Footnote
This classification helps in budgeting and financial analysis.
83
What is the significance of the Effective Gross Income in real estate accounting?
It represents the total income after accounting for vacancies and rent loss
## Footnote
Effective Gross Income is a key performance indicator in property management.
84
What accounts are included in the Payroll Costs category?
* Payroll taxes
* Employee benefits
* Employee insurance
## Footnote
These costs are essential for managing employee-related expenses.
85
Fill in the blank: The category for expenses related to trash removal is categorized under _______.
[Services]
## Footnote
This reflects the operational costs associated with maintaining the property.
86
What is the primary purpose of the chart of accounts?
To set up categories of accounts that reflect the kind of business that a company is engaged in.
87
What are the two major categories in a chart of accounts?
* Income or receipts
* Expenses or disbursements
88
Define accounts receivable.
Accounts waiting to receive money for goods or services that the company has sold.
89
Provide an example of accounts receivable.
Monthly rent owed by tenants.
90
Define accounts payable.
Payments that a company will make from its various accounts to creditors.
91
What is a specific example of accounts payable?
Payments for plumbing repairs, janitorial supplies, and pest control.
92
Fill in the blank: Accounts _______ are debts that a company owes to a creditor.
[payable]
93
Fill in the blank: Utilities are a major subdivision of _______.
[expenses]
94
What should be forecasted and planned for in relation to utilities?
Controlling the costs of utilities.
95
True or False: Utilities are considered irregular expenses in business.
False
96
What is the relationship between income categories and a company's expected revenue?
Accounts reflect the categories of income that the company expects to receive.
97
Fill in the blank: Money in accounting is primarily categorized into _______ and expenses.
[income]
98
What type of costs should be controlled in relation to utilities?
Regular costs associated with doing business.
99
What does the term 'disbursements' refer to?
Expenses incurred by the company.
100
What are accounts payable?
Debts that a company owes to a creditor, usually for goods and services.
101
What are accounts receivable?
Revenues to be collected, usually for goods and services.
102
Why is monitoring the process of accounts payable and receivable important?
To avoid mistakes in payments and outright fraud.
103
How have computerized bookkeeping and check-writing software affected payment processes?
They have made paying the company's bills easier but require care.
104
What does effective management of receivables depend on?
Knowing their status at all times.
105
Fill in the blank: Close management of receivables helps in keeping a constant and even flow of _______.
[cash]
106
What is a good business practice regarding accounts payable?
Keep them as up to date as possible.
107
What should be done with receipts at rental properties?
Deposit all receipts daily.
108
True or False: Prompt payment of debts to suppliers improves business relationships.
True
109
What should be done with late rent payments?
Quickly contact tenants who have not paid on time.
110
What is a potential issue at the beginning of the month regarding rent payments?
Checks are allowed to pile up for a few days.
111
What is the consequence of greater independence and speed in bookkeeping?
Workers need to make reliable judgments and show a strong sense of responsibility.
112
Why is it important to collect receivables quickly?
To ensure prompt deposit in the bank and maintain cash flow.
113
Fill in the blank: Attention to receivables pays _______.
[literally]
114
What is the impact of proper collection of receivables and disbursements on the budget?
They have a major impact on the budget in general.
115
What should be ensured about supplier invoices?
* Invoices are numbered and printed on special paper
* Supplier signs the invoice
* All reimbursable expenses are backed up by receipts
116
How can utility bills be verified?
By checking against the meters on site and ensuring accurate readings.
117
What is one basic responsibility of the accounting staff?
To check that the arithmetic on invoices is correct.
118
Who should verify the correct account information on invoices?
A central department, like accounting.
119
What happens if an account number is invalid?
The bill can be 'bounced back' to the department that submitted it.
120
What should happen at each stage of the payment process?
Control over payment should shift to another staff member with new, distinct responsibilities.
121
How many people should review and approve invoices before payment?
More than one person.
122
True or False: Only one person should check the work of employees and suppliers' delivery or services.
False.
123
Fill in the blank: One of the basic responsibilities of the accounting staff should be to check that the _______ on invoices is correct.
arithmetic
124
What is a tip for detecting irregularities on a bill?
Ensure supplier bills are printed on special paper and numbered.
125
What should be determined regarding utility meters?
What parts of the property each meter covers.
126
What should every employee who checks or authorizes an invoice do?
Initial or sign the invoice
127
Why is it important for employees who authorize payment to be different from those who issue checks?
To enhance control and prevent fraud
128
What is a recommended procedure for routing invoices?
Set up a procedure for routing invoices to employees in a certain order
129
What should employees who authorize payment ensure is noted on the invoice?
The check number of the payment
130
What is the role of the staff member responsible for reconciling the bank statement?
Ensure that the payees on checks agree with the payees listed in the books
131
What common fraud occurs related to payees on checks?
Listing one payee in the books and another on the check
132
What is the purpose of the chart of accounts?
To categorize money that comes into a business as income and leaves as disbursements
133
What does accounts receivable track?
Money owed to a business
134
What does accounts payable organize?
Paying a company's bills
135
What is centralized purchasing?
A way for a company to monitor expenses for supplies, services, and materials
136
What is a purchase order?
A form on which company employees list in detail what they would like to buy
137
What is the typical method by which companies buy supplies?
Through purchase orders
138
What exception exists to the use of purchase orders?
Contracts
139
Who normally processes the purchase order in a company?
The purchasing agent or other authorized person
140
Fill in the blank: Control of money is central to _______.
accounting
141
True or False: Employees who issue checks should also put those checks in the mail.
False
142
What is a purchase order?
A document sent to an outside supplier to request goods or services.
## Footnote
Purchase orders are standard practice for most companies to formalize purchases.
143
Who typically processes the purchase order in a company?
The company's purchasing agent or an authorized person.
## Footnote
In smaller companies, this may be the site manager.
144
What is the first step in the purchasing process?
An employee identifies a need and submits a purchase order.
## Footnote
Example: Wanda B. Goodmanager orders one hundred computer diskettes.
145
What happens after the purchase order is filled out?
It is sent to the purchasing agent for approval.
## Footnote
The purchasing agent then sends the order to the preferred supplier.
146
What is the role of the purchasing agent after the supplier ships the goods?
Records the delivery and forwards the bill to accounting for payment.
## Footnote
This step is crucial for managing accounts payable.
147
True or False: Companies that do not use purchase orders are the norm.
False.
## Footnote
Most companies use purchase orders as standard practice.
148
List two advantages of using purchase orders.
* Orders can be tracked and kept in chronological order
* Access can be limited to authorized employees
## Footnote
These advantages enhance control and accountability in purchasing.
149
What does the use of purchase orders allow authorized buyers to do?
Check that the correct products are ordered.
## Footnote
This helps ensure compliance with company purchasing standards.
150
How does using purchase orders benefit the purchasing department?
It allows consolidation of orders for better deals.
## Footnote
Grouping orders can lead to discounts and cost savings.
151
Fill in the blank: The purchasing agent can monitor the flow of supplies into the company with the use of _______.
purchase orders
## Footnote
This monitoring helps maintain inventory levels effectively.
152
Why are larger orders more likely to get discounts from suppliers?
Suppliers prefer bulk orders over multiple small orders.
## Footnote
This can result in cost efficiency for the company.
153
What is a purchase order?
A document issued by a buyer to a seller, detailing the products or services ordered.
154
What information is typically included on a purchase order?
* Purchase order number
* Property address
* Product or order numbers
* Quantity
* Description of products
* Price (if known)
155
True or False: A purchase order is a promise of payment from the buyer's perspective.
True
156
What role does a purchasing agent play in a company?
They may issue purchase orders and manage the purchasing function.
157
In larger companies, who usually handles the purchasing function?
A separate department.
158
How do purchase orders help in a company's operations?
They allow orderly buying of goods and services and capture data on purchases.
159
Fill in the blank: A purchase order serves as a centralized set of records that captures data on what was bought and _______.
[when]
160
What is the significance of the purchase order number?
It is used for referencing on all invoices and packing slips.
161
What is the purpose of including a shipping address on a purchase order?
To specify where the products should be delivered.
162
What does the buyer need to approve on a purchase order?
The order details before it is finalized.
163
What is the first step in the purchasing process?
An employee finds that her department needs an item and orders it on a company purchase order.
164
Who approves the purchase order in a company?
The purchasing agent.
165
What does the purchasing agent do after receiving the purchase order?
Sends the order to the company's preferred supplier.
166
What is a benefit of using numbered purchase orders?
Orders can be tracked and kept in chronological order.
167
True or False: Companies that do not use purchase orders are the norm.
False.
168
How does using purchase orders help in product ordering?
It allows authorized buyers to check that the correct products are ordered.
169
What advantage does consolidating orders provide?
It allows for better deals by grouping orders from multiple departments.
170
Fill in the blank: Purchase orders must carry the number of the _______.
[account to be charged]
171
What does the use of purchase orders safeguard against?
Unauthorized use of company money.
172
Why is it beneficial for larger orders to be placed?
They are more likely to receive a discount from a supplier.
173
What must an employee be aware of when placing a purchase order?
Budgetary restraints.
174
What happens to the bill from the supplier after the delivery is recorded?
It is forwarded to accounting (Accounts Payable) for payment.
175
What role does the purchasing agent play in the delivery process?
Records the delivery and sends the items to the requesting employee.
176
What is the purpose of limiting access to purchase orders?
To ensure that only authorized employees can view and use them.
177
What is the purpose of using purchase orders in a company?
To centralize the buying function in a single department or person
## Footnote
Purchase orders ensure accountability and streamline purchasing processes.
178
What must purchase orders carry to ensure proper accounting?
The number of the account to be charged
## Footnote
This requirement helps in adhering to budgetary restraints.
179
How do purchase orders safeguard against unauthorized use of company money?
Vendors will only turn over goods to employees with proper purchase orders
## Footnote
This practice helps prevent fraud and pilferage.
180
True or False: Vendors will hand over goods to any employee claiming to represent the company.
False
## Footnote
Vendors require proper purchase orders to release goods.
181
What is one exception to the use of purchase orders?
The use of contracts
## Footnote
Contracts are often used for specific goods or services.
182
What is a contract?
A legally enforceable agreement between two parties
## Footnote
A contract can describe actions to be taken or not taken.
183
Fill in the blank: A contract can describe what goods or services a party will provide and include a _______.
[schedule]
## Footnote
This allows for clear expectations in business relationships.
184
What does outsourcing mean?
Contracting with another company or individual to provide services
## Footnote
Outsourcing is often done to reduce costs.
185
How is outsourcing typically conducted?
By contract
## Footnote
This formalizes the agreement and expectations between parties.
186
What is an example of outsourcing in a business context?
Hiring a cleaning company for an office building
## Footnote
This can be more cost-effective than performing the service internally.
187
What does outsourcing mean?
Contracting with another company or individual to provide services for a company, usually at lower cost than the company could provide itself.
188
Give an example of outsourcing.
Hiring a cleaning company for an office building instead of keeping cleaning staff.
189
What are purchase orders and contracts in business?
Central to doing business; they help in monitoring and controlling how a company buys supplies and materials.
190
How are assets and liabilities defined in accounting?
Income is generally considered an asset, while expenditures are liabilities.
191
What are accounts receivable and accounts payable?
Accounts receivable are assets, and accounts payable are liabilities.
192
What types of assets exist in accounting?
Short-term (current) assets and long-term assets.
193
What are current assets?
Assets expected to be converted to cash or used up during the year.
194
Provide an example of a long-term asset.
Real estate.
195
What distinguishes current liabilities from long-term liabilities?
Current liabilities fall due within the coming year, while long-term liabilities are paid off over an extended time span.
196
What is a common example of a long-term liability?
A mortgage.
197
Why do we refer to a company's books?
Historically, companies kept a memorandum book, a journal, and a ledger to maintain records.
198
What has changed in record-keeping due to technology?
Computer software programs have altered traditional practices.
199
What is the basic idea behind categorizing income and expenses?
Categorizing by account and monitoring assets and liabilities.
200
Fill in the blank: Current assets are expected to be converted to cash or used up during the _______.
year
201
True or False: Long-term assets are resources held for any time period shorter than one year.
False
202
What is one of the main responsibilities of a site manager?
Managing financial contributions.
203
What is one of the main responsibilities of the site manager?
To act as a record keeper
## Footnote
This role is central to controlling and monitoring finances.
204
What are the four areas of performance site managers should focus on?
* Generating income
* Meeting budget projections for income and expenses
* Controlling expenditures while maintaining physical integrity
* Satisfying the owner's financial goals for the property
## Footnote
These areas are crucial for effective property management.
205
What will Lesson 2 focus on?
Generating cash flow and net operating income
## Footnote
It will examine the components of cash flow and management strategies.
206
What is the importance of record keeping for site managers?
It contributes to and protects the owner's return on investment
## Footnote
Effective record keeping is essential for financial monitoring.
207
Fill in the blank: The site manager must keep an eye on _______ and liabilities.
assets
208
What will Lesson 3 focus on?
Controlling income and expenses
## Footnote
This lesson is aimed at improving financial performance.
209
True or False: The site manager's role includes satisfying the owner's financial goals.
True
210
How are financial transactions categorized in accounting?
Financial transactions are categorized based on their nature and impact on financial statements
## Footnote
Categories include revenues, expenses, assets, liabilities, and equity.
211
What is the difference between cash, accrual, and modified accrual accounting?
The differences are as follows:
* Cash accounting recognizes transactions when cash is exchanged
* Accrual accounting recognizes transactions when they are incurred, regardless of cash flow
* Modified accrual accounting combines aspects of both cash and accrual accounting.
212
What is the purpose of a chart of accounts?
The purpose of a chart of accounts is to organize financial transactions into categories for easier tracking and reporting.
213
What is the difference between accounts receivable and accounts payable?
Accounts receivable represents money owed to the business, while accounts payable represents money the business owes to others.
214
How does a purchase order system work?
A purchase order system works by creating a document that authorizes a purchase transaction, detailing the items, quantities, and agreed prices.
215
What are assets and liabilities?
Assets are resources owned by a business that have economic value, while liabilities are obligations that the business owes to outside parties.
216
How do site managers contribute to the financial health of the residential and commercial properties that they manage?
Site managers contribute by overseeing operations, controlling costs, and ensuring the properties generate revenue effectively.
217
Fill in the blank: The major distinction in accounting is between _______ and cash outflows.
[cash in-flows]
218
What is cash coming into a business called?
Income, revenue, receipts
## Footnote
These terms refer to the financial resources that a business receives.
219
What is cash flowing out of a business called?
Disbursements, expenses, expenditures
## Footnote
These terms indicate the costs incurred by a business.
220
What are accounts receivable?
Money due to the business
## Footnote
Accounts receivable are considered assets.
221
What are accounts payable?
Debts that the business owes to suppliers and vendors
## Footnote
Accounts payable are considered liabilities.
222
In cash accounting, when are revenues declared?
In the accounting period in which the cash is received
## Footnote
This method focuses on actual cash transactions.
223
In cash accounting, when are expenses declared?
In the accounting period in which cash is paid out
## Footnote
This reflects when the actual cash outflow occurs.
224
In accrual-basis accounting, when are revenues declared?
In the accounting period in which they are earned
## Footnote
This method recognizes revenue when it is realized, regardless of cash flow.
225
In accrual-basis accounting, when are expenses declared?
In the accounting period in which the expense is incurred
## Footnote
This reflects when the obligation to pay arises, not when cash is paid.
226
What is modified accrual accounting?
Some revenue categories and expense categories are declared on a cash basis and some on an accrual basis
## Footnote
This method combines aspects of both cash and accrual accounting.
227
What is a chart of accounts?
An organized list of the accounts to which expenses and income will be assigned
## Footnote
It is customized to fit the purposes of a business.
228
What are the basic divisions of the chart of accounts?
Income (revenues) and expenses (disbursements)
## Footnote
These divisions help categorize financial transactions.
229
Why are charts of accounts organized?
To fit the purposes and plans of the business
## Footnote
This organization groups related accounts by function.
230
Fill in the blank: Accounts receivable are considered _______.
Assets
## Footnote
This indicates that they represent future economic benefits to the business.
231
Fill in the blank: Accounts payable are considered _______.
Liabilities
## Footnote
This indicates that they represent obligations that the business must settle.
232
What is the purpose of purchase orders in a company?
To allow orderly buying of goods and services for a company's day-to-day business
## Footnote
Purchase orders capture data on what was bought and when, helping to organize purchases.
233
How do purchase orders contribute to a company's buying process?
They provide control over buying and prevent informal or impulsive purchases
## Footnote
Purchase orders are typically sent to suppliers by a company's purchasing agent.
234
What are the two basic divisions in accounting?
Assets and liabilities
## Footnote
Income is considered an asset, while expenditures are classified as liabilities.
235
What types of properties are classified as assets?
Apartment buildings, office buildings, and shopping centers
## Footnote
These properties provide income.
236
What is the relationship between accounts receivable and accounts payable?
Accounts receivable are assets; accounts payable are liabilities
## Footnote
This reflects their roles in financial accounting.
237
What distinguishes current assets from long-term assets?
Current assets will be converted to cash or used up during the year; long-term assets are held for longer than a year
## Footnote
Current liabilities are due within the coming year, while long-term liabilities extend over a longer time span.
238
What is a common example of a long-term liability in real estate?
A mortgage
## Footnote
Mortgages are typically paid off over an extended period.
239
What is a key responsibility of a site manager in relation to record keeping?
To be a record keeper
## Footnote
Record keeping is essential for controlling financial operations.
240
What is the primary focus of the FIN201 course?
Basic Budgeting and Accounting for Real Estate Managers
241
Who published the study guide for the FIN201 course?
Institute of Real Estate Management
242
Where is the National Headquarters of the Institute of Real Estate Management located?
430 North Michigan Avenue, Chicago, Illinois 60611-4090
243
What is the telephone number for the Institute of Real Estate Management?
(312) 329-6000
244
What type of information do IREM programs provide?
General information on real estate management practices
245
True or False: IREM makes representations that the information offered is applicable in all jurisdictions.
False
246
What should attendees seek when specific problems arise in real estate management?
Competent professional advice
247
What does the Institute of Real Estate Management assume no responsibility for?
Consequences of an attendee's reliance on IREM program contents or materials
248
What is stated about the case study scenarios and examples used in the course?
They are fictitious and any similarity to real properties is purely coincidental
249
Fill in the blank: Forms, documents, and other exhibits in the course books are _______.
samples only
250
What does the Institute of Real Estate Management not necessarily endorse?
The use of forms, documents, and other exhibits
251
What year was the copyright for the materials in the study guide established?
1999
252
What is the main purpose of IREM programs?
To provide general information on real estate management practices
## Footnote
IREM encourages attendees to seek competent professional advice for specific problems.
253
Where is the headquarters of the Institute of Real Estate Management located?
430 N. Michigan Ave., Chicago, IL 60611
## Footnote
The institute's contact number is (312) 329-6000.
254
What should attendees do regarding specific real estate management issues?
Seek competent professional advice
## Footnote
IREM does not assume responsibility for consequences arising from reliance on its materials.
255
What type of content is prohibited from reproduction without consent?
IREM program contents and materials
## Footnote
Reproduction is strictly prohibited unless authorized in writing by the Institute.
256
What is the title of Lesson 1 in the Basic Budgeting and Accounting for Real Estate Managers course?
Money in Action: Basic Concepts and Language of Accounting
257
What is included in the course materials provided by IREM?
Forms, documents, and other exhibits
## Footnote
These are samples only and not necessarily endorsed by IREM.
258
True or False: IREM programs contain a complete statement of all information essential to proper real estate management.
False
## Footnote
IREM makes no representation that the information is applicable in all jurisdictions.
259
Fill in the blank: IREM retains copyright in the original materials and in any _______.
translation to other languages
260
What is the focus of Lesson 4 in the course?
How to Create and Analyze Budgets
261
What type of studies are used in IREM programs?
Fictitious case study scenarios and examples
## Footnote
Any similarity to real properties is purely coincidental.
262
What does the course cover regarding financial performance?
Working with Measures of Financial Performance
263
What is the purpose of the policy statement concerning recording IREM programs?
To prohibit unauthorized reproduction or recording of program contents
264
How many lessons are outlined in the Basic Budgeting and Accounting for Real Estate Managers course?
Six lessons
265
What does Lesson 6 focus on?
Preparing and Analyzing Financial Reports
266
What is the title of the course introduced in the document?
Basic Budgeting and Accounting for Real Estate Managers
267
What is the focus of Lesson 3 in the course?
Focus on Record Keeping
268
What is the contact number for the Institute of Real Estate Management?
(312) 329-6000
269
What does Lesson 5 cover?
Budgeting and Working with Capital
270
What is the primary focus of the course 'Basic Budgeting and Accounting for Real Estate Managers'?
To teach budgeting and accounting principles specifically for real estate management.
271
What are the key lessons covered in this course?
* Money in Action: Basic Concepts and Language of Accounting
* Working with Measures of Financial Performance
* Focus on Record Keeping
* How to Create and Analyze Budgets
* Budgeting and Working with Capital
* Preparing and Analyzing Financial Reports
272
Fill in the blank: The lesson titled '_______' focuses on understanding how to manage financial performance metrics.
Working with Measures of Financial Performance
273
True or False: The course includes a section on creating and analyzing budgets.
True
274
What is the importance of record keeping in real estate management?
It ensures accurate financial reporting and compliance with regulations.
275
Fill in the blank: '_______' is a key lesson that involves understanding and managing capital in real estate.
Budgeting and Working with Capital
276
What does the lesson on preparing and analyzing financial reports cover?
It covers the creation, interpretation, and importance of financial statements.
277
What is the first lesson of the course?
Money in Action: Basic Concepts and Language of Accounting
278
True or False: The course does not address financial performance measures.
False
279
What is the purpose of the lesson on creating and analyzing budgets?
To equip learners with skills to plan and manage financial resources effectively.
280
What does the course introduction include?
An overview of the course objectives and structure.
281
What is the primary goal of the course 'Basic Budgeting and Accounting for Real Estate Managers'?
To provide knowledge necessary for managing budgeting and accounting functions in property management.
## Footnote
The course is beneficial for current real estate managers or those interested in entering the field.
282
What certifications can points earned from this course apply toward?
* CERTIFIED PROPERTY MANAGER® (CPM®) designation
* ACCREDITED RESIDENTIAL MANAGER® (ARM®) award
## Footnote
These certifications are recognized in the property management industry.
283
How should independent study students utilize the Study Guide?
They should read the Study Guide and use the Workbook for activities and note-taking.
## Footnote
The Study Guide serves as a comprehensive resource for home study students.
284
What key components does the Study Guide include for each lesson?
* Key concepts
* Learning objectives
* Instructions for independent study
* Recap section with summary questions
* Suggestions for additional resources
## Footnote
These components help guide the student's learning process.
285
What is the function of the activity answers section in the Study Guide?
It provides potential answers or scenarios for workshop activities and suggested answers to key questions.
## Footnote
This section aids students in verifying their understanding of the material.
286
What resources does the Workbook provide for students?
* Key concepts for the lesson
* Learning objectives
* Learning guidelines
* Specific activities and self-test reviews
* Key actions for implementing strategies
## Footnote
The Workbook is essential for in-class learning and note-taking.
287
True or False: The Workbook is used exclusively by independent study students.
False
## Footnote
The Workbook is intended for both independent study and classroom use.
288
Fill in the blank: The Study Guide includes a recap section that provides a list of learning summary questions followed by a series of _______.
[summary statements]
## Footnote
This recap helps reinforce the learning objectives.
289
What type of activities does the Workbook include?
* Key questions for self-test review
* Activities for active learning
* Instructions for completing activities
## Footnote
These activities are designed to enhance student engagement and understanding.
290
What additional materials may be suggested in the Study Guide's implementation section?
* Additional resources
* Sample forms
* Other learning tools
## Footnote
These materials can support the application of learned concepts.
291
What are the learning objectives for each lesson intended to achieve?
They guide students in understanding the key concepts and skills necessary for real estate management.
## Footnote
Learning objectives provide a clear focus for both study and assessment.
292
What is the primary purpose of the Study Guide?
To serve as the independent study component and a take-home handout for classroom students.
## Footnote
It provides key concepts, learning objectives, and instructions for independent study students.
293
What does the Study Guide include within each lesson?
Key concepts, learning objectives, instructions for independent study, readings, recap section, and additional resources.
## Footnote
The recap section includes learning summary questions and answers.
294
What is the role of the Workbook in the course?
It serves as the student's in-class resource and note-taking tool.
## Footnote
It includes key concepts, learning objectives, instructions, and key actions for workplace implementation.
295
What type of questions does the activity answers section of the Study Guide provide?
Potential answers or scenarios for activities, specific answers to some activities, and suggested answers to key questions.
## Footnote
It notes when subjective or personalized answers are required.
296
Fill in the blank: The Study Guide includes a recap section that lists _______.
learning summary questions.
## Footnote
These restate the learning objectives followed by summary statements.
297
True or False: The Workbook is only used by classroom students.
False.
## Footnote
Home study students also use the Workbook to perform activities.
298
What should home study students do with the Workbook activities?
Perform the activities as instructed by the Study Guide.
## Footnote
They can also check their answers using the activity answer section of the Study Guide.
299
What type of information does the Study Guide provide for independent study students?
Information they might receive from an instructor and fellow students during an on-site class.
## Footnote
This is essential for completing learning objectives.
300
What is included in the instructions for independent study students?
Using the textbook, supplementary readings, and performing activities.
## Footnote
These instructions guide students in their self-directed learning.
301
What does the Workbook offer regarding key actions?
Key actions the student can take to implement strategies learned from the lesson in the workplace.
## Footnote
This helps bridge theory and practice.
302
Fill in the blank: The Study Guide provides additional resources, sample forms, or other learning tools in a section titled _______.
implementation.
## Footnote
This section supports practical application of the lessons.
