CAM Financial & Budgeting Responsibilities 3

Question 1

A property collects $12,000 in security deposits. How should these funds be treated on the property's financial records?

Accepted Answer

Held as a liability until returned or applied to damages

Answer

Security deposits are liabilities because they belong to the tenant until conditions for return or forfeiture are determined.

Question 2

Which ratio compares a property's net operating income to its market value or purchase price?

Accepted Answer

Capitalization rate

Answer

The capitalization (cap) rate = NOI ÷ Property Value, and is used to assess investment returns and property valuation.

Question 3

When a property manager reconciles the operating account at month-end, which document is compared against the bank statement?

Accepted Answer

General ledger or cash receipts journal

Answer

The general ledger records all financial transactions, which are reconciled against the bank statement to identify discrepancies.

Question 4

An apartment community has a gross potential rent of $1,200,000, a 5% vacancy rate, and operating expenses of $540,000. What is the net operating income (NOI)?

Accepted Answer

$660,000

Answer

EGI = $1,200,000 × 0.95 = $1,140,000; NOI = $1,140,000 − $540,000 = $600,000… wait: $1,140,000 − $540,000 = $600,000. The correct answer is $600,000.

Question 5

Which of the following is typically NOT included when calculating net operating income (NOI)?

Accepted Answer

Mortgage principal and interest payments

Answer

NOI is calculated before debt service; mortgage payments are excluded to allow for comparison across properties with different financing.

(CAM) Certified Apartment Manager Practice Test

(CAM) Certified Apartment Manager Practice Test

CAM Financial & Budgeting Responsibilities 3