In Calculating the Net Operating Income (NOI) of a Property

question 22

Multiple Choice

In calculating the net operating income (NOI) of a property, the "above-line" treatment of capital expenditures implies:

• A) capital expenditures are excluded from the calculation of NOI.
• B) capital expenditures are included in the calculation of NOI.
• C) capital expenditures are set equal to NOI.
• D) capital expenditures are divided by NOI.

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Definitions:

Accounts Payable

Liabilities or amounts owed by a business to creditors for purchases or services rendered that haven't been paid for yet.

Contra-Asset

An account displayed on the balance sheet that reduces the value of a related asset, such as accumulated depreciation.

Liability

Financial obligations, debts, or responsibilities owed by a business to others, to be settled over time through the transfer of economic benefits.

Invoice Approval Form

Used by the accounting department in checking the invoice and finally approving it for recording and payment.