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

When analyzing budget variances, which reports are commonly utilized?

1. General ledger and balance sheet

2. Operating statement and income statement

3. Operating statement and general ledger

4. Accounts payable and accounts receivable reports

The correct answer is: Operating statement and general ledger

The operating statement and general ledger are essential tools in analyzing budget variances because they provide insights into the financial performance and operational activities of a property. The operating statement, often referred to as the profit and loss statement, outlines income and expenses related to operations, allowing for direct comparisons against budgeted figures. This helps identify areas where actual performance deviates from expectations. The general ledger serves as the core of financial record-keeping, containing detailed transactional data that supports the figures reported in the operating statement. By examining the general ledger, a supervisor can track specific account activities and investigate discrepancies, thus allowing for deeper analysis of budget variances. Together, these reports enable property managers to assess financial health, control costs, and make informed decisions to improve financial performance. While other options mention important financial documents, they do not specifically focus on the direct operational and performance-related variances needed for budget analysis as effectively as the operating statement and general ledger do.