BOMI Budgeting and Accounting: Designed for Exam
Success with Comprehensive Explanations and
Complete Solutions for Every Question
Scenario - Chapter 5 . Ideal Towers is well located and structured. It is in the downtown core,
surrounded by shops and restaurants. It is also on the eastern bank of the river, which features
a long open area park, and is close to the main commuter train station. - -correct ans- -The
building itself is relatively new, has ample underground parking, and offers office suites
amenable to various configurations for tenants. Nevertheless, Ideal Towers struggles to make
money for the owners.
Elvin, the new property manager, has been hired to solve this problem and make Ideal Towers
profitable. Given the building's physical location, - -correct ans- -Elvin suspects that revenues
and expenses are not being properly recorded. He begins his investigation of the problem.
Elvin discovers that the finance department does not pay heed to the three functions of the
revenue cycle. For instance, no one in the department understands that the final step in the
revenue cycle is: - -correct ans- -a. billing tenants. b. collecting what is billed.
c. rank ordering what is billed.
d. reporting of billings and collections.
d. reporting of billings and collections. - -correct ans- -
Since tenants move into their spaces at different times during a particular month, the first
month's rent is often prorated. Unfortunately, Elvin learns, the leases signed by - -correct ans-
-both 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 - -correct 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. - -correct ans- -a. aggregated b. benchmarked
c. cascaded
d. stepped
d. stepped - -correct 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. - -correct ans- -a. added to;
base rent
b. added to; additional rent
c. subtracted from; base rent
d. subtracted from; additional rent
a. added to; base rent - -correct 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. - -correct ans- -These charges
would be considered..BLANK.. rent. a. additional
b. base
c. categorical
d. defined
, a. additional - -correct 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. - correct
ans- -This means that the holdover tenant should pay..blank.. per month. a. $20,000
b. $31,250
c. $56,250
d. $62,500
b. $31,250 - -correct 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. - -
correct ans- -a. one-time tenant charges b. Elvin's personal office supply orders
c. elevator maintenance fees
d. Ideal Towers' leasing brokerage fees
a. one-time tenant charges - -correct 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. - -correct ans- -a. is; does b. is; does not
c. is not; does
d. is not; does not
b. is; does not - -correct ans- -
Success with Comprehensive Explanations and
Complete Solutions for Every Question
Scenario - Chapter 5 . Ideal Towers is well located and structured. It is in the downtown core,
surrounded by shops and restaurants. It is also on the eastern bank of the river, which features
a long open area park, and is close to the main commuter train station. - -correct ans- -The
building itself is relatively new, has ample underground parking, and offers office suites
amenable to various configurations for tenants. Nevertheless, Ideal Towers struggles to make
money for the owners.
Elvin, the new property manager, has been hired to solve this problem and make Ideal Towers
profitable. Given the building's physical location, - -correct ans- -Elvin suspects that revenues
and expenses are not being properly recorded. He begins his investigation of the problem.
Elvin discovers that the finance department does not pay heed to the three functions of the
revenue cycle. For instance, no one in the department understands that the final step in the
revenue cycle is: - -correct ans- -a. billing tenants. b. collecting what is billed.
c. rank ordering what is billed.
d. reporting of billings and collections.
d. reporting of billings and collections. - -correct ans- -
Since tenants move into their spaces at different times during a particular month, the first
month's rent is often prorated. Unfortunately, Elvin learns, the leases signed by - -correct ans-
-both 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 - -correct 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. - -correct ans- -a. aggregated b. benchmarked
c. cascaded
d. stepped
d. stepped - -correct 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. - -correct ans- -a. added to;
base rent
b. added to; additional rent
c. subtracted from; base rent
d. subtracted from; additional rent
a. added to; base rent - -correct 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. - -correct ans- -These charges
would be considered..BLANK.. rent. a. additional
b. base
c. categorical
d. defined
, a. additional - -correct 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. - correct
ans- -This means that the holdover tenant should pay..blank.. per month. a. $20,000
b. $31,250
c. $56,250
d. $62,500
b. $31,250 - -correct 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. - -
correct ans- -a. one-time tenant charges b. Elvin's personal office supply orders
c. elevator maintenance fees
d. Ideal Towers' leasing brokerage fees
a. one-time tenant charges - -correct 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. - -correct ans- -a. is; does b. is; does not
c. is not; does
d. is not; does not
b. is; does not - -correct ans- -
