BOMA – BUDGETING AND ACCOUNTING
EXAM QUESTIONS AND VERIFIED
ANSWERS
546 QUESTIONS AND ANSWERS
Identify key items that comprise the bookkeeping process. (2) - ANSWER
Bookkeeping refers to the recording and classifying activities of transactions.
Explain what the accountant does/roles played by an accountant (3) -
ANSWER Accounting is viewed in essence is a system of summarizing,
interpreting, and communicating financial information.
What are the major functions associated with accounting? (4) - ANSWER
Accounting is the recording process. It is the method of organizing, analyzing,
and presenting financial information.
Identify functions included in the budget process. (4) - ANSWER Budgeting is
the constant procedure of balancing resources and spending. A strategy is
developed; research and statistics serve as the basis.
Budget shows what a business believes are the most important, based on
resource allocation. - ANSWER
Identify and briefly describe the types of accounting cycles most common to the
commercial real estate management business (5) - ANSWER revenue cycle
and the expenditure cycle
What are the three summary account types? (9) -
, ANSWER assets, liabilities, and owner's equity—with each other as they
increase and decrease with debits and credits.
On the balance sheet, assets, liabilities, and owner's equity show the current
status of the finances of the business or the building. - ANSWER
How are debits and credits applied to fundamental accounting equation? (11-12)
- ANSWER liabilities and owner's equity normally have a credit balance
a credit entry will increase the liability or owner's equity and a debit entry will
decrease the liability or owner's equity
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 - ANSWER
explain the relationship between the balance sheets and summary accounts (15)
- ANSWER The balance sheet is literally a statement of the balances, or
amounts, within all of the assets, liabilities, and owner's equity summary
accounts of the business.
what are the generally accepted accounting principles? (GAAP) (19) -
ANSWER Generally accepted accounting principles (GAAP) are a common set
of accounting principles, standards, and procedures that companies use to record
accounting data and compile their financial statements.
GAAP includes both authoritative standards (such as those set by policy boards)
and commonly accepted ways of recording and reporting accounting
information. - ANSWER These standards are codified by the Financial
Accounting Standards Board (FASB).
,What are international accounting standards?(19) - ANSWER Standards
established and maintained by the International Accounting Standards Board,
that are used by multi national companies
What are some internal reporting needs common to the real property
industry?(20) - ANSWER property industry internal reporting includes, tenant
collections, vendor payments, and monthly operating results.
Describe standard financial statements that businesses use? (20) - ANSWER
These financial statements include an income statements, a balance sheet, and a
statement of cash flows. The income statement presents the revenues earned and
expenses incurred in earning those revenues, net income or net loss for the
period.
What are typical accounting methods available for recording financial
transactions? (21) - ANSWER Accounting and financial reports may be
prepared on a cash, accrual, or modified accrual (sometimes called hybrid)
accounting basis.
Under the cash method, income and expenses are recognized only when
received or paid out. This is the most basic form of accounting and has a core
focus on the actual timing of both cash received and cash dispersed. -
ANSWER
Explain accounting control strategies as they are used in real estate. (22) -
ANSWER control 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 is a seasoned manager of finances for Beach
Properties and has just hired on Janet, he reviews many areas of budgeting and
accounting that she will need to know and also conduct. ANSWER Although
she has attended and graduated with a major in finance from the local college
she has no practical experience in the real world. In the next few weeks Harold
works with her and assesses what knowledge she really has concerning
budgeting and accounting.
He'll also get her to do some simple projects. Insofar as she proves successful,
she will get bigger, more complex jobs. Insofar as she fails, Harold will
continue to provide training and guidance. - ANSWER
"Janet, your primary job function for the next several 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 - ANSWER b. bookkeeping
To the extent you can play the role of accountant, Harold tells Janet, you'll do a
lot more functions. But you won't have to.Blank. Financial data - ANSWER B.
memorizing
If Janet does an accounting function she will. blank.financial data.
a. classify
b. identify
c. interpret
d. record - ANSWER c. interpret
EXAM QUESTIONS AND VERIFIED
ANSWERS
546 QUESTIONS AND ANSWERS
Identify key items that comprise the bookkeeping process. (2) - ANSWER
Bookkeeping refers to the recording and classifying activities of transactions.
Explain what the accountant does/roles played by an accountant (3) -
ANSWER Accounting is viewed in essence is a system of summarizing,
interpreting, and communicating financial information.
What are the major functions associated with accounting? (4) - ANSWER
Accounting is the recording process. It is the method of organizing, analyzing,
and presenting financial information.
Identify functions included in the budget process. (4) - ANSWER Budgeting is
the constant procedure of balancing resources and spending. A strategy is
developed; research and statistics serve as the basis.
Budget shows what a business believes are the most important, based on
resource allocation. - ANSWER
Identify and briefly describe the types of accounting cycles most common to the
commercial real estate management business (5) - ANSWER revenue cycle
and the expenditure cycle
What are the three summary account types? (9) -
, ANSWER assets, liabilities, and owner's equity—with each other as they
increase and decrease with debits and credits.
On the balance sheet, assets, liabilities, and owner's equity show the current
status of the finances of the business or the building. - ANSWER
How are debits and credits applied to fundamental accounting equation? (11-12)
- ANSWER liabilities and owner's equity normally have a credit balance
a credit entry will increase the liability or owner's equity and a debit entry will
decrease the liability or owner's equity
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 - ANSWER
explain the relationship between the balance sheets and summary accounts (15)
- ANSWER The balance sheet is literally a statement of the balances, or
amounts, within all of the assets, liabilities, and owner's equity summary
accounts of the business.
what are the generally accepted accounting principles? (GAAP) (19) -
ANSWER Generally accepted accounting principles (GAAP) are a common set
of accounting principles, standards, and procedures that companies use to record
accounting data and compile their financial statements.
GAAP includes both authoritative standards (such as those set by policy boards)
and commonly accepted ways of recording and reporting accounting
information. - ANSWER These standards are codified by the Financial
Accounting Standards Board (FASB).
,What are international accounting standards?(19) - ANSWER Standards
established and maintained by the International Accounting Standards Board,
that are used by multi national companies
What are some internal reporting needs common to the real property
industry?(20) - ANSWER property industry internal reporting includes, tenant
collections, vendor payments, and monthly operating results.
Describe standard financial statements that businesses use? (20) - ANSWER
These financial statements include an income statements, a balance sheet, and a
statement of cash flows. The income statement presents the revenues earned and
expenses incurred in earning those revenues, net income or net loss for the
period.
What are typical accounting methods available for recording financial
transactions? (21) - ANSWER Accounting and financial reports may be
prepared on a cash, accrual, or modified accrual (sometimes called hybrid)
accounting basis.
Under the cash method, income and expenses are recognized only when
received or paid out. This is the most basic form of accounting and has a core
focus on the actual timing of both cash received and cash dispersed. -
ANSWER
Explain accounting control strategies as they are used in real estate. (22) -
ANSWER control 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 is a seasoned manager of finances for Beach
Properties and has just hired on Janet, he reviews many areas of budgeting and
accounting that she will need to know and also conduct. ANSWER Although
she has attended and graduated with a major in finance from the local college
she has no practical experience in the real world. In the next few weeks Harold
works with her and assesses what knowledge she really has concerning
budgeting and accounting.
He'll also get her to do some simple projects. Insofar as she proves successful,
she will get bigger, more complex jobs. Insofar as she fails, Harold will
continue to provide training and guidance. - ANSWER
"Janet, your primary job function for the next several 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 - ANSWER b. bookkeeping
To the extent you can play the role of accountant, Harold tells Janet, you'll do a
lot more functions. But you won't have to.Blank. Financial data - ANSWER B.
memorizing
If Janet does an accounting function she will. blank.financial data.
a. classify
b. identify
c. interpret
d. record - ANSWER c. interpret
