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Day 5: Intro to Accounting
Terms in this set (51)
What is trust accounting?
A trustee manages the money for another group of people (i.e. the property managers manage funds on behalf of the property owner, and even tenants).
Why would an owner want a property manager?
Property managers have knowledge regarding laws, taxes, and are authorized to run background checks. In addition, an owner may own multiple properties.
What trusts does a tenant pay into?
The tenant trust and owner trust.
What types of payments might go into a tenant trust?
Security deposits, pet deposits, last month's rent, cleaning deposits
What types of payments might go into an owner trust via tenants?
Rent, utilities, and fees.
What types of payments go in and out of an owner trust via the property owner(s)?
Distributions (i.e. owner getting paid after property manager and fees) and contributions (i.e. roof repairs).
Vendor payments come from which trust?
AppFolio doesn't manage what type of accounting?
Management fees are an ___________________ to the property owner.
Management fees are an ___________________ to the property management company.
AppFolio is a system built for what type of accounting?
Transactions are recorded from what view?
The property owner's view.
The Owner Trust is what type of account?
The operating cash key account.
The Owner Trust is used for what transactions?
Receive rent, pay bills, pay owner(s).
The default GL number for the Owner Trust is 1150, but it can be different. True or false?
The owner needs to have what in their owner trust at all times?
They need to have enough money to cover all their property balances at any point in time.
The Tenant Trust is what type of account?
The Escrow cash key account.
The Tenant Trust holds what?
Security deposits for tenants.
The default GL number for the Tenant Trust is 1160, but it can be different. True or false?
The owner needs to have what in their tenant trust at all times?
They need to have enough money to cover all security deposit balances at any point in time.
Chart of Accounts
List of all GL accounts used.
What are the different types of GL accounts?
Income, expense, liability, capital, asset, and cash.
All transactions impact what two GL accounts?
Non-cash GL account and a cash GL account.
Non-Cash GL Account
Defines the class for a transaction (i.e. rent income, utilities, etc.).
Represents real-life cash transactions.
Representative of a real bank account the property managers use to manage their funds.
Cash accounts are tied to what accounts?
Select set of GL accounts that are automatically used when you run certain functions within the system.
What are some examples of key accounts?
Prepayments, Management Fees, Application Fees, Security Deposits
When you pay something out in AppFolio, it's referred to as a:
Bill (or invoice).
Property managers will sometimes refer to ______________ as invoices as well.
A simple form of bookkeeping and accounting in which each financial transaction is recorded with a single entry.
In single-entry accounting, you have to balance debits and credits. True or false?
What's the downside of single-entry accounting?
It's hard to detect errors. There's no descriptions as to what a purchase was for (i.e. landscaping, security deposit, expense, etc.).
Means every transaction has a debit and a credit.
Cash is a __________ account.
Which accounts increase with a debit and decrease with a credit?
Cash, Asset, and Expense.
Which accounts increase with a credit and decrease with a debit?
Capital, Liability, and Income.
Double-Entry Accounting records what two things?
1. The receipt/payment of money, meaning cash increased/decreased.
2. Labeling what the transaction is for (i.e. WHY we received/paid money).
All transactions have a debit and a credit. True or false?
What types of bank account set ups are there?
1. Two cash, two bank
2. Two cash, one bank
3. One cash, one bank
How are two cash, two bank accounts set up?
The operating and escrow (tenant) cash accounts are offset to different bank accounts.
How are two cash, one bank accounts set up?
The operating and escrow (tenant) cash accounts are offset to the same bank account.
How is one cash, one bank set up?
One cash account operates as both operating and escrow (tenant), and no security deposits are withheld for the tenants.
Which account set up is the least common?
One cash, one bank.
In one cash, one bank, who holds the deposits?
Generally, it's the owners.
Non-cash GL's are offset to which account?
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