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
A property manager receives a utility bill for $3,200 in December but pays it in January. Under cash basis accounting, when is this expense recorded?
Answer: January, when the payment is made
Cash basis accounting records expenses only when cash actually leaves the account, regardless of when the obligation arose.
Which of the following is an example of a variable operating expense at an apartment community?
Answer: Turnover and make-ready costs
Turnover costs fluctuate with vacancy and tenant changes, making them variable, whereas taxes, fixed fees, and mortgage payments remain constant.
A property's gross rent multiplier (GRM) is 10, and it generates $120,000 in annual gross rents. What is the estimated property value using GRM?
Answer: $1,200,000
Property Value = GRM × Annual Gross Rent = 10 × $120,000 = $1,200,000.
A manager is asked to calculate the physical occupancy rate for a 200-unit property with 182 units occupied. What is the occupancy rate?
Answer: 91%
Physical occupancy rate = Occupied Units ÷ Total Units = 182 ÷ 200 = 91%.
Which financial report would a property manager most likely use to track unpaid tenant balances and how long they have been outstanding?
Answer: Accounts receivable aging report
The accounts receivable aging report categorizes outstanding tenant balances by how long they have been unpaid (30, 60, 90+ days).
When budgeting for insurance at a multifamily property, the manager should primarily consider which factor?
Answer: Replacement cost of the building, liability exposure, and current market rates
Insurance premiums are driven by the building's replacement cost, liability risks, coverage limits, and market pricing from carriers.
A property owner instructs the manager to distribute net operating income monthly after paying all expenses. What should the manager prepare before making the distribution?
Answer: A monthly owner's statement reconciling income, expenses, and the distribution amount
An owner's statement documents all income collected, expenses paid, and the resulting net amount available for distribution, providing full transparency.