Certified Apartment Portfolio Supervisor (CAPS) Practice Exam - Module 2

What are the accounts receivable related to assets in a property?

1. Debts owed by the property

2. Income expected from tenants, such as unpaid rents

3. Future potential income from new leases

4. Expenses that are expected to be paid

The correct answer is: Income expected from tenants, such as unpaid rents

The correct choice reflects the nature of accounts receivable as they relate to assets in a property, specifically emphasizing the income expected from tenants, which includes unpaid rents. In property management, accounts receivable is an important component of cash flow; it represents money that the property is owed but has not yet received. This typically originates from tenants who have not yet paid their rent, creating a financial asset for the property owner or management. Understanding this concept is critical because accounts receivable directly affects the financial health of a property. When properties have high accounts receivable due to unpaid rents, it can indicate potential cash flow issues. By tracking these amounts, management can implement strategies to increase collections and ensure stable income. The other options do not accurately define accounts receivable in the context of property assets. Debts owed by the property do not represent receivables; instead, they pertain more to liabilities. Future potential income from new leases, while important, is not yet accounted for as it relies on assumptions rather than current receivables. Lastly, expected expenses are not related to accounts receivable; they fall under accounts payable and represent anticipated outflows rather than inflows of cash. Thus, the focus on income expected from tenants is the accurate representation of accounts