Unit 10 quiz

Rents for a duplex are $1,500 per unit and have been paid. For a settlement on June 5, the prorated amount for combined rents is A) $2,500 credit seller, debit buyer. B) $500 debit seller, credit buyer. C) $2,500 debit seller, credit buyer. D) $500 credit seller, debit buyer.

C) $2,500 debit seller, credit buyer.

The seller agreed to seller financing of $10,000 at 9%. For a settlement on April 6, what is the entry for interim interest on the new loan, if the first payment is due June 1? A) $12.50 debit seller, credit buyer B) $15.00 debit seller, credit buyer C) $62.50 debit buyer, credit seller D) $60.00 debit buyer, credit seller

C) $62.50 debit buyer, credit seller

Who pays to record the deed of trust? A) Seller B) Check the contract C) Buyer D) Broker

C) Buyer

What happens to the due diligence fee at settlement? A) It is prorated between the seller and the buyer. B) It is a debit to the seller only. C) It is a debit to the seller and a credit to the buyer. D) Nothing, because the seller keeps the fee, in addition to the sales price.

C) It is a debit to the seller and a credit to the buyer.

A utility bill of $36.00 was paid in advance for the months of July through September. What is the entry for the proration when settlement is on September 19? A) $4.40 credit seller, debit buyer B) $4.40 debit seller, credit buyer C) $31.60 credit seller, debit buyer D) $31.60 debit seller, credit buyer

A) $4.40 credit seller, debit buyer

The property taxes for the year are $1,800, with settlement on June 10. Giving the seller the day of settlement, what will be the tax debit and credit at settlement? A) $800 debit seller; $800 credit buyer B) $800 debit seller; $1,000 credit buyer C) $1,000 debit seller; $1,000 credit buyer D) $795 credit seller; $1,005 credit buyer

A) $800 debit seller; $800 credit buyer

What is the entry for a loan assumption balance? A) Debit seller, credit buyer B) Credit seller, credit buyer C) Debit seller, debit buyer D) Credit seller, debit buyer

A) Debit seller, credit buyer

How should you handle tenant security deposits? A) Debit seller, credit buyer the full amount B) Debit buyer, credit seller prorated amount C) Debit seller, credit tenant the full amount D) Debit seller, credit broker prorated amount

A) Debit seller, credit buyer the full amount

Monthly HOA dues of $900 were paid in advance on the first of the month with the seller owning the day of settlement. At settlement on September 20, the dues would be shown as A) debit buyer, credit seller $300. B) credit seller, debit buyer $600. C) debit seller, credit buyer $300. D) credit buyer, debit seller $600.

A) debit buyer, credit seller $300.

The charge for pest inspection for a VA loan will be a single-entry charge of A) debit seller. B) credit buyer. C) credit seller. D) debit buyer.

A) debit seller.

If the buyer's subtotal of charges/debits is $121,000 and subtotal of credits is $23,000, then A) the buyer is bringing $98,000 to settlement. B) the broker's commission will be $98,000. C) the buyer is taking $98,000 away from settlement. D) the settlement statement is wrong.

A) the buyer is bringing $98,000 to settlement.

Taxes for the preceding year were $2,970. For a June 6 settlement, how will taxes for the current year be entered on the settlement statement? A) $1,683 debit seller, credit buyer B) $1,287 debit seller, credit buyer C) $1,683 credit seller, debit buyer D) $1,287 credit seller, debit buyer

B) $1,287 debit seller, credit buyer

A seller has already paid quarterly HOA dues of $101.20, which will cover dues from July 1 to September 30. If the settlement is August 17, and the seller owns the day of closing, which would be a correct entry on the settlement statement using the 30-day month/360-day year method? A) $52.85 debit buyer and credit seller B) $48.35 debit buyer and credit seller C) $101.20 credit seller and debit buyer D) $48.35 debit seller and credit buyer

B) $48.35 debit buyer and credit seller

Which party normally pays for the recording of the warranty deed? A) Listing broker B) Buyer C) Seller D) Selling broker

B) Buyer

Who ALWAYS pays to start a lender/escrow account? A) Lender B) Buyer C) Whoever volunteers D) Seller

B) Buyer

Should a pending loan payment be prorated? A) Only if requested by the seller B) Never C) Only if requested by the buyer D) It is the broker's decision

B) Never

Who will ALWAYS be charged for unpaid taxes for the preceding year? A) No entry; will be paid from the tax reserve B) Seller C) Broker D) Buyer

B) Seller

How is the buyer's earnest money deposit treated at settlement? A) The seller is debited the earnest money amount as already paid. B) The buyer receives credit for the earnest money deposit. C) The seller is credited with the deposit that is brought to settlement. D) The deposit has no effect on settlement because it was already deposited.

B) The buyer receives credit for the earnest money deposit.

The sales price of the property will show on the settlement statements as A) debit seller, credit buyer. B) debit buyer, credit seller. C) credit buyer, and seller. D) debit buyer, and seller.

B) debit buyer, credit seller.

The tenant security deposit will show on the NCREC closing worksheet as A) debit seller the full amount. B) debit seller the full amount; credit buyer the full amount. C) debit tenant, credit buyer. D) debit seller and credit buyer a prorated amount.

B) debit seller the full amount; credit buyer the full amount.

A prorated item that has been paid in arrears typically shows up as A) debit buyer, credit seller. B) debit seller, credit buyer. C) debit seller, credit broker. D) debit seller and buyer.

B) debit seller, credit buyer.

If both the buyer and the seller have subtotals where there are more debits than credits, what is the result of the settlement? A) The seller will bring money to settlement; the buyer will take money away. B) The buyer will bring money to settlement; the seller will take money away. C) The buyer and the seller will bring money to settlement. D) The buyer and the seller will take money away from settlement

C) The buyer and the seller will bring money to settlement.

A broker reviewing the closing attorney's Closing Disclosure before settlement would start with which document to determine whether the charges are correct? A) The buyer's Loan Estimate and all reports received during the due diligence period B) Can assume the charges are correct and just check the prorations C) The sales contract between the seller and the buyer D) The North Carolina Real Estate Commission's settlement guidelines

C) The sales contract between the seller and the buyer

A prorated item that has been paid in advance typically shows up as A) debit seller, credit broker. B) debit seller, credit buyer. C) debit buyer, credit seller. D) debit seller and buyer.

C) debit buyer, credit seller.

A property has two special city assessments: one for $263.00 that the seller has agreed to pay and another for $72.46 that the buyer has agreed to assume and will pay as allowed by the city. How should you handle the special assessments? A) $263.00 debit seller, credit buyer B) $72.46 debit buyer C) $263.00 debit seller, 72.46 debit buyer D) $263.00 debit seller

D) $263.00 debit seller

Taxes on a home will be paid in arrears on January 1 of next year. The taxes for the preceding year were $1,200. With a sale closing on April 15, and the seller responsible through the day of closing, how will taxes be handled at the settlement? A) $350 credit seller, $850 credit buyer B) $850 credit seller, $850 debit buyer C) $850 debit buyer, $350 debit seller D) $350 debit seller, $350 credit buyer

D) $350 debit seller, $350 credit buyer

Which of the following is NOT part of every proration? A) Total number of days in the billing period B) Number of days owned by the person responsible C) Total amount for the billing period D) Annual interest

D) Annual interest

All of the following are single-entry debits to the buyer EXCEPT A) loan origination fee. B) interest on a new loan. C) homeowners insurance premium. D) earnest money.

D) earnest money.

In North Carolina closings before September, unpaid current-year taxes are always debit seller, credit buyer.

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