Practice Test Geeks(CAM) Certified Apartment Manager Practice Test
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Financial & Budgeting Responsibilities Flashcards

7 cards from real CAM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Financial & Budgeting Responsibilities flashcards as text

  1. A property manager discovers that actual maintenance costs are running 18% over budget midway through the fiscal year. What is the BEST immediate course of action?

    Answer: Analyze the cause, adjust the forecast, and notify ownership with a remediation plan

    Identifying the root cause and communicating proactively with ownership allows informed decisions and demonstrates financial stewardship.

  2. Which financial statement shows a property's assets, liabilities, and owner equity at a specific point in time?

    Answer: Balance sheet

    The balance sheet (statement of financial position) captures the financial snapshot of assets, liabilities, and equity on a given date.

  3. When preparing a capital expenditure budget for an apartment community, which item would typically be classified as a capital expense rather than an operating expense?

    Answer: Replacement of all HVAC units

    Replacing HVAC units extends the useful life of the property and is capitalized, whereas routine maintenance is expensed.

  4. A property's gross potential rent is $500,000 annually, and the economic vacancy loss is $40,000. What is the effective gross income before adding other income?

    Answer: $460,000

    Effective gross income equals gross potential rent minus vacancy and credit losses: $500,000 − $40,000 = $460,000.

  5. Which budgeting method requires every expense to be justified from zero each budget cycle rather than using the prior year as a baseline?

    Answer: Zero-based budgeting

    Zero-based budgeting starts from a 'zero base' and requires justification for all expenses regardless of the previous budget.

  6. A CAM candidate is reviewing a profit and loss statement. Where would concession costs (such as one month free rent) typically appear?

    Answer: As a reduction to gross potential rent or rental income

    Concessions reduce the effective rental income collected and are typically shown as a deduction from gross potential rent.

  7. What does the debt service coverage ratio (DSCR) measure in apartment property finance?

    Answer: The ability of net operating income to cover mortgage payments

    DSCR = Net Operating Income ÷ Debt Service; a ratio above 1.0 means the property generates enough income to cover its loan payments.