Chapter 2 Flashcards Preview

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Flashcards in Chapter 2 Deck (25)
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1
Q

Why is record keeping important?

A

It is important because records are required for meeting future refernce needs as well as for ensuring accuracy and for meeting tax and legal requirements.

2
Q

What purpose do records serve?

A

They allow raw data like rental payments, utility bills, etc to be converted into more permanent forms that can be retrieved and referenced later.

3
Q

Why is attention to accounts payable important?

A

It is important because prompt payment to vendors, suppliers, etc facilitates good relationships.

4
Q

Why are controls necessary?

A

They are necessary to esptablish checks and balances for detecting irregularities in bills.

5
Q

What types of controls are commonly used?

A

Dating/numbering of invoices
Reimbursable expenses backed by receipts
Accounts numbers on invoices
Etc.

6
Q

How is a checks and balances system established?

A

It is established by having diiferent individuals perform different functions.
Ex) Those who authorize payments are not the same ones who mail checks

7
Q

What is a purchase order?

A

It is a legally binding document requesting specific goods or services.

8
Q

What does a purchase order contain?

A

They contain the product or service requested, prices, payment terms, vendor address, PO# etc.

9
Q

What is the typical journey of a purchase order?

A

1) Quotes received
2) PO issued
3) Vendor receives PO
4) Vendor supplies goods or services
5) Goods or services received
6) Invoice received
7) Invoice checked for accuracy
8) Invoice sent to Accounts Payable for payment

10
Q

What are some advantages of using purchase orders?

A

They allow for tracking purchases in chronological order, limit access, centralize purchasing, and provide for safeguards against unauthorized use of company funds,

11
Q

What is a contract?

A

It is a legally enforceable document between two parties.

12
Q

What is a chart of accounts?

A

It is the list of line items or categories that classifies accounts.

13
Q

What is BOMA International’s Functional Accounting Guide?

A

It is an account guide specifically tailored to the commercial real estate industry.

14
Q

What are the levels of detail in the BOMA Chart of Accounts?

A

1) Categories of Building Operations
2) Means and methods by which building functions are achieved
3) subcategories

15
Q

What is a typical tenant file?

A

A file containing information about each tenant including copies of leases, lease summaries, and escalation clauses.

16
Q

What is rent roll?

A

It is a quick reference of an entire property that contains information about each tenant.

17
Q

What is a vacancy report?

A

It is a summary of all of a properties vacancies/

18
Q

What is a delinquency report?

A

Aa monthly sumary of overdue payments, actions taken to collect, and other information,

19
Q

What is a tickler system?

A

A method used to remind the user of key dates and deadlines.

20
Q

What is an audit trail?er

A

A record of every financial transaction associated with a property.

21
Q

Records convert raw data into a:

a) report to be be reviewed by management
b) permanent form for later reference and retrieval
c) statistical chart
d) readable format

A

b) permanent form for later reference and retrieval

22
Q

(Fill in the blank) Property and facility managers should have a (an)_________ system to remind them of key deadlines and filing dates.

a) management
b) audit trail
c) delinquency
d) tickler

A

d) tickler

23
Q

All of the following are considered accounts payable except:

a) vendor payments
b) supplier payments
c) rent payments from tenants
d) service provider payments

A

c) rent payments from tenants

24
Q

What is the emans companies use to organize how the company orders and buys what is needs to do business?

a) purchase orders
b) accounts payable
c) accounts receivable
d) company direction

A

a) purchase orders

25
Q

BOMA International’s Functional Accounting Guide is specific to the commercial real estate industry in that it segregates expenses according to the:

a) functional cause, such as cleaning or repairs
b) vendor or supplier
c) type of oocupancy, such as retail or parking
d) ownership structure

A

a) functional cause, such as cleaning or repairs