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Property Management Accounting
Terms in this set (39)
What are the (2) primary rules of double-entry bookkeeping?
1. For every transaction listed in the general journal, there must be at least one debit and one credit.
2. The sum of the debits must equal the sum of all the credits.
A summary of all debits and credits of a certain type of for a company or property.
Chart of Accounts
A list of all accounts a landlord or property manager uses to categorize his transactions.
How many types of major accounts are there?
What are the five major types of accounts?
Things a property owns.
Amounts a property owes.
Amounts that belong to the property's owners after subtracting what's owed.
Amounts a property earns.
Amounts a property spends.
You can have a single account for tracking all utility expenses, as well as another account for tracking electricity or natural gas. True or false?
A chronological list of each and every financial transaction that occurs during the course of business.
What's another name for the general journal?
Book of original entry.
General Journal Entries
Every financial transaction that occur during the course of business.
What must you have when you record a journal entry?
At least one debit and one credit, and the debits and credits must balance out.
The sum of all debits must equal the sum of all credits for a single transaction. True or false?
You need to have an equal number of debits and credits for one transaction. True or false?
A compilation of individual accounts.
What's the difference between the general journal and the general ledger?
The general journal shows transactions in a chronological order, while the general ledger will show transactions totals by account.
Debits __________ the value of debit accounts.
Credits __________ the value of credits accounts.
What accounts are debit accounts?
Assets and expenses.
What accounts are credit accounts?
Income, equity and liabilities.
What are some examples of assets?
Bank accounts, property and equipment, accounts receivable.
What are some examples of liabilities?
Security deposits, prepaid rent, pet deposits, loans, accounts payable.
What are some examples of equity?
Owner equity, loans.
What are some examples of income?
Rent income, late-fee income, utility income, laundry income, repairs income.
What are some examples of expenses?
Management fees, repairs, supplies, insurance, utilities, advertising, interest, depreciation expenses.
What are the three main financial statements?
1. Income statement
2. Cash flow statement
3. Balance sheet
A summary of a property's profit or loss during a given period of time. It will show total income, expenses, and net income (the amount of income that remains after subtracting expenses).
What's another name for an income statement?
Profit and loss statement, or P&L.
What is the income statement's purpose?
To show whether a property made or lost money during a specific period.
Cash Flow Statement
Shows a company's cash inflows and outflows over a specific period of time. It shows whether or not the company has enough money to pay its bills.
What is the purpose of a cash flow statement?
It shows you whether the property generated cash.
The balance sheet shows what a company owes and what it owes at a specific point in time. It's divided into three parts: assets liabilities, and equity.
Net profits or losses from prior years that have
been distributed to the company's owners.
Year-to-date profits or losses.
What are the four steps of the accounting cycle?
2. Record/journal the transaction in the general journal
3. Post the entries on the general ledger
4. Total accounts
You need to record credit card purchases differently from check purchases. True or false?
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