Exam

Question 1

Compared to accounting, booking does not concern itself with ____ financial data:

a. classifying
b. identifying
c. recording
d. interpreting

Answer 1

d. interpreting

Question 2

____ accounting cycle, includes the functions required to lease the office space to tenants for cash:

a. exchange
b. expenditure
c. receipts
d. revenue

Answer 2

d. revenue

Question 3

The fundamental accounting equation is?

Answer 3

Assets = Liabilities + Owner’s Equity

Question 4

____ is the common set of accounting principles, standards and procedures that companies use to record accounting data and compile their financial records.

Answer 4

GAAP

Question 5

_____ accounting, is the method that records revenues and expenditures related tot he period for which they are applicable, whether or not cash has been transferred.

a. cash method
b. accrual basis
c. small business
d. large enterprise

Answer 5

b. accrual basis

Question 6

____ allow for tighter controls over approvals, tracking purchases in chronological order, and providing safeguards against unauthorized use of company funds

Answer 6

Purchase Orders

Question 7

A lease ____ is the most frequently retrieved document in a tenant file because it contains the core information about the lease.

a. abstract
b. addendum
c. code
d. propectus

Answer 7

a. abstract

Question 8

A ____ shows the physical property and its space availability,

a. customer profile
b. delinquency report
d. stepped rent report
d. vacancy report

Answer 8

d. vacancy report

Question 9

The purpose of a lease is to:

a. make money for the landlord
b. save money for the tenant
c. protect the interests of both the landlord and tenant
d. eliminate the need for lawsuits

Answer 9

c. protect the interests of both the landlord and the tenant

Question 10

A(n) ____ lease is when rental payment is the base rent paid to the landlord, which includes property operating expenses incurred by the landlord; TT pays separately for the insurance and property taxes.

Answer 10

double-net

Question 11

According to GAAP, base rent amounts are usually shown as the total term for the entire lease and often also the:

Answer 11

exact amount owed each month and/or year

Question 12

____ is the specific type of rent that provides a return on invested capital and includes scheduled rent increases.

a) plain
b) base
c) simplified
d) standard

Answer 12

b) base

Question 13

Among common billable expenses, these charges (additional rent: landscaping, parking and exterior lighting) typically fall into the category or:

a) real property taxes
b) operating expenses
c) common area maintenance charges
c) electricity

Answer 13

c) common area maintenance charges

Question 14

When ID an expenditure as a capital item, the expenditure ___ be included in the escalatable cost pool. As such, tenant ____ be charged for the costs incurred through payment for capital expenses

a) can;can
b) can; cannot
c) cannot; can
d) cannot; cannot

Answer 14

d) cannot; cannot

Question 15

Maximizing profit, a certain way to receive the value of a dollar of rent adjusted for inflation is to ensure leases have a provision to annually increase base rent based on increases in the:

a) GDP
b) GNP
c) CPI
d) WPI

Answer 15

c) CPI

Question 16

GAAP states that rent and other charges to tenants begin:

a) the first day of every month
b) the last day of every month
c) upon occupancy by the tenant
d) upon vacancy by the previous tenant

Answer 16

c) upon occupancy by the tenant

Question 17

In a ___ market, when rents are ___ than average, tenants often agree to stepped rent increases throughout their lease term.

a) soft; lower
b) soft; higher
c) tight; lower
d) tight; higher

Answer 17

a) soft; lower

Question 18

A tenant is occupying expired space in holdover rent: If the holdover rent rate is 1.35 times the monthly base rent (of $20,000), the tenant’ monthly holdover rent would be:

a) $14,815
b) $20,000
c) $27,000
d) $30,769

Answer 18

c) $27,000

Question 19

According to GAAP, landlords are ___ tenant with reminder notices for rent payments

a) legally obligated to provide
b) advised to provide
c) discouraged from providing
d) barred from providing

Answer 19

b) advised to provide

Question 20

___ budgeting, wherein different parties takes responsibility for different sections of the budget for the property

a) compartmentalized
b) distributed
c) responsibility
d) section

Answer 20

c) responsibility

Question 21

In budgeting the base rent for tenants of a strip mall, staff will start by:

a) quantifying leasing efforts needed to market vacant space
b) identifying a success ration in obtaining renewals for leases expiring during the year
c) increasing base rents for future stepped rent increases
d) scheduling base rent monthly for each existing tenant

Answer 21

d) scheduling base rents monthly for each existing tenant

Question 22

No charges can be assessed against tenants in spaces that are vacant and some tenants have expense caps written into their leases. These facts help explain ___, which is the difference between recoverable operating expenses and the actual operating expenses:

a) lagging
b) regression
c) slippage
d) underwritting

Answer 22

c) slippage

Question 23

For budgeting other income amounts (ie. rooftop solar panels/storage) it is best advised to use a(n) ___ schedule for these additional rent charges:

a) monthly tenant -by-tenant
b) annual tenant-by-tenant
c) monthly property-wide
d) annual property-wide

Answer 23

a) monthly tenant-by-tenant

Question 24

When comparing service vendors, standard industry practice compares ___ rates while ___ an emplhaseis on the grammer in vendor proposals.

a) flat; places
b) flat; does not place
c) hourly; places
d) hourly; does not place

Answer 24

c) hourly; places

Question 25

As a rule, the PM should view the POs forwarded to vendors as ___ requests for goods or services:

a) basic
b) formal
c) informal
d) tenantive

Answer 25

b) formal

Question 26

The first step to code invoices is:

a) review the budget to determine if the expense items were anticipated
b) check the log to see when the particular invoices were received
c) sort the invoices into a General Building account
d) hold theinoices until the first business day of the following month

Answer 26

a) review the budget to determine if the expense items were anticipated

Question 27

What type of invoices should be expected in an organizations computer holding file?

a) paid
b) unpaids
c) operational
d) capital

Answer 27

b) unpaids

Question 28

Reviewing for cost control, the PM categorize mortgage payment and property insurance as ___ costs.

a) fixed
b) semi-fixed
c) variable
d) semi-variable

Answer 28

b) semi-fixed

Question 29

Prior to purchasing a property, the buyer projected the expenses of a property over their anticipated holding period. This projection is known as a:

a) pro ana
b) pro bono
c) pro capite
d) pro forma

Answer 29

d) pro forma

Question 30

As a PM, which type of PO copy would be sent to the PM once it ia approved?

a) the control copy
b) the receiving copy
c) a numerically filed copy
d) an alphabetically filed copy

Answer 30

c) a numerically filed copy

Question 31

For accounting purposes, costs are segregated. The major reasons for setting up various cost accounts are to establish a basis for pricing and to enable management to ___ cost excesses.

a) amortize
b) customie
c) localize
d) synthesize

Answer 31

c) localize

Question 32

The budget drawn up is typical in that its time frame corresponds with the reporting frequency required by:

a) GAAP
b) the owner
c) the state
d) the federal government

Answer 32

b) the owner

Question 33

In determining next years property taxes, the mill rate is multiplied by the assessed value of the property. The monies derived from this formulation typically go on to fund suh purposes s:

a) property maintenance
b) public health and safety
c) capital improvement projects
d) employee retirement accounts

Answer 33

b) public health and safety

Question 34

Building mgmt is granted one right to appeal a real estate tax assessment:

a) per year
b) every 10 years
c) every 20 years
d) for the life of the building

Answer 34

a) per year

Question 35

Aiming to keeping leasing costs down in a soft market means that ___ advertising will be required. Additionally, there is a large supply of vacant space available in the market similar to the property, which means that the advertising effort will most likely be of ___ duration.

a) more; longer
b) more; shorter
c) less; longer
d) less; shorter

Answer 35

a) more; longer

Question 36

In order to determine the capitalization rate for a proposed project, the PM should divide the ___ by the value of the property

a) taxable gain
b) net present value
c) replacement reserve
d) net operating income

Answer 36

d) net operating income

Question 37

A vendor’s records for a property should contain a record of each ___ for the property during the month.

a) cash receipt and cash disbursement
b) cash receipt and tax abatement
c) cash disbursement and tax assessment
d) tax abatement and tax assessment

Answer 37

a) cash receipt and cash disbursement

Question 38

A GL prepared correctly shoudl find cash disbursements transferred to the expense account as ___, with total disbursements transferred to the cash account as ___

a) debits; a debit
b) debits; a credit
c) credits; a debit
d) credits; a credit

Answer 38

b) debits; a credit

Question 39

In review, an income statement shows income and expense activity:

a) ordered alphabetically
b) ordered from least to greated
c) coded to the approprite tax ID number
d) coded to the appropriate account

Answer 39

d) coded to the appropriate account

Question 40

During the income accrual process, the revenue should be recorded, then offset by a(n) ___ reflecting the amount of income deemed uncollectible

Answer 40

expense

Question 41

Expenses that apply to future periods will often be paid in one lump sum. Each of the following is a prepaid expense except for:

a) employee severence
b) property taxes
c) building maintenance
d) long-term equipment service and maintenance records

Answer 41

a) employee severence

Question 42

One way of making the proposed Capital projects more affordable is to take advantage of depreciation. While Canadian depreciation regulations implement the declining balance method, at present, the US is goverend by legislation focused on the modified accelerated cost recovery system, which has increase the useful life of commercial, nonresidential, real property to ___ years:

a) 20
b) 25
c) 34
d) 39

Answer 42

d) 39

Question 43

The case basis income statement and the balance sheet all appear to be complete and accurate upon review. This means that transfers between the two statement are recorded as a(n_:

a) plus and a minus
b) debit and a credit
c) input and an output
d) positie and a negative

Answer 43

b) debit and a credit

Question 44

Using the EER to compare the actual performance of the mall against similar commercial retail building in the selected region, the true avg as presented in the report measures the cost or income per square foot of the property by re4ferring ___ of building contributing data.

a) only to the size
b) only to the number
c) to both the number abnd size
d) neither to the number nor size

Answer 44

d) neither to the number nor size

Question 45

The midpoint of a set of data being analyzed is the:

a) mean
b) median
c) mode
d) range

Answer 45

b) median

Question 46

EER has limitation, for exammple, data in the EER may be biased toward ___ properties:

a) older
b) newer
c) larger
d) smaller

Answer 46

a) older

Question 47

Which of the following is not a mean to find out a prospective tenants’ earning power?

a) return on equity
b) price of earnings
c) earnings per share
d) common-sized comparative statements

Answer 47

b) price of earnings

Question 48

What factor may affect adjustmeents to the GAAP current ratio (ie. relation of current assets to current liabilities); 2 to 1 being a minimally acceptable measure?

a) the company’s CEP
b) the composition of the company’s current assets
c) the company’s reputation in the industry
d) the company’s commitment to energy-saving initiatives

Answer 48

b) the composition of the company’s current assets

Question 49

In reviewing tenant’s financial statements, the accountants add back interest exense to income before taxes to determibne the amount of income available to pay debt service. This income is then divided by the debt service amount to determin the number of times debt service can be paid. The number of times debt service can be paid from income is called the:

a) debt service ratio
b) deb service constant
c) net liability ratio
d) net liability constant

Answer 49

a) debt service ratio

Question 50

Following GAAP, the PM ensures theat the financial statements for the property are stated in ___, the most reasonable form of a stable monetary unit.

a) ratios
b) euros
c) dollars
d) percentages

Answer 50

c) dollars