PROPERTY MANAGEMENT ACCOUNTING EXAM
PRACTICE TEST QUESTIONS AND CORRECT ANSWER
WITH EXPLANATION LATEST 2025-2026
1. Property management accounting focuses on:
A. Building construction
B. Tracking income, expenses, and financial performance of properties
C. Tenant eviction
D. Appraisal only
Answer: B
Rationale: It records and analyzes property financial activity.
2. Gross income in property accounting refers to:
A. Income after expenses
B. Total rent and other income before deductions
C. Loan balance
D. Appraised value
Answer: B
Rationale: Total revenue before expenses.
3. Net Operating Income (NOI) is:
A. Income after mortgage payments
B. Income minus operating expenses
C. Total rent collected
D. Taxes only
Answer: B
Rationale: Core profitability measure.
4. Operating expenses include:
,A. Property purchase price
B. Maintenance, utilities, and management costs
C. Sale price
D. Appraisal fees
Answer: B
Rationale: Day-to-day property costs.
5. Capital expenditures (CapEx) are:
A. Monthly rent
B. Major improvements or upgrades
C. Utility bills
D. Insurance premiums
Answer: B
Rationale: Long-term investments.
6. Accounts receivable refers to:
A. Money owed by tenants
B. Money paid to vendors
C. Property value
D. Expenses paid
Answer: A
Rationale: Outstanding tenant payments.
7. Accounts payable refers to:
A. Money owed by tenants
B. Money owed to vendors or suppliers
C. Rent income
D. Appraisal value
Answer: B
Rationale: Outstanding bills.
8. A rent roll is used to:
, A. Appraise property
B. Track tenant rent payments
C. Build structures
D. Issue loans
Answer: B
Rationale: Income tracking tool.
9. Cash flow is:
A. Property value
B. Income minus expenses
C. Loan amount
D. Tax rate
Answer: B
Rationale: Net money movement.
10. Positive cash flow means:
A. Expenses exceed income
B. Income exceeds expenses
C. No income
D. No tenants
Answer: B
Rationale: Profitable operation.
11. Negative cash flow means:
A. Profit
B. Expenses exceed income
C. No expenses
D. High occupancy
Answer: B
Rationale: Operating loss.
12. Depreciation in real estate refers to:
PRACTICE TEST QUESTIONS AND CORRECT ANSWER
WITH EXPLANATION LATEST 2025-2026
1. Property management accounting focuses on:
A. Building construction
B. Tracking income, expenses, and financial performance of properties
C. Tenant eviction
D. Appraisal only
Answer: B
Rationale: It records and analyzes property financial activity.
2. Gross income in property accounting refers to:
A. Income after expenses
B. Total rent and other income before deductions
C. Loan balance
D. Appraised value
Answer: B
Rationale: Total revenue before expenses.
3. Net Operating Income (NOI) is:
A. Income after mortgage payments
B. Income minus operating expenses
C. Total rent collected
D. Taxes only
Answer: B
Rationale: Core profitability measure.
4. Operating expenses include:
,A. Property purchase price
B. Maintenance, utilities, and management costs
C. Sale price
D. Appraisal fees
Answer: B
Rationale: Day-to-day property costs.
5. Capital expenditures (CapEx) are:
A. Monthly rent
B. Major improvements or upgrades
C. Utility bills
D. Insurance premiums
Answer: B
Rationale: Long-term investments.
6. Accounts receivable refers to:
A. Money owed by tenants
B. Money paid to vendors
C. Property value
D. Expenses paid
Answer: A
Rationale: Outstanding tenant payments.
7. Accounts payable refers to:
A. Money owed by tenants
B. Money owed to vendors or suppliers
C. Rent income
D. Appraisal value
Answer: B
Rationale: Outstanding bills.
8. A rent roll is used to:
, A. Appraise property
B. Track tenant rent payments
C. Build structures
D. Issue loans
Answer: B
Rationale: Income tracking tool.
9. Cash flow is:
A. Property value
B. Income minus expenses
C. Loan amount
D. Tax rate
Answer: B
Rationale: Net money movement.
10. Positive cash flow means:
A. Expenses exceed income
B. Income exceeds expenses
C. No income
D. No tenants
Answer: B
Rationale: Profitable operation.
11. Negative cash flow means:
A. Profit
B. Expenses exceed income
C. No expenses
D. High occupancy
Answer: B
Rationale: Operating loss.
12. Depreciation in real estate refers to:
