Florida Real Estate Practice Exam

How can prorated expenses be calculated?

1. 365-day year only

2. 360-day year only

3. Either 360-day year or 365-day year

4. Fiscal year basis only

The correct answer is: Either 360-day year or 365-day year

Prorated expenses can be calculated by dividing the total annual expense by the number of days in the selected time period, such as a fiscal year or a calendar year. Option A is incorrect because it only considers using a 365-day year, while option B only considers a 360-day year. These options do not provide flexibility for different time periods, such as leap years. Option D is also incorrect because it only considers a fiscal year basis, which may not always align with a company's financial reporting period. Option C is the most accurate as it allows for the use of either a 360-day or 365-day year based on the specific time period being evaluated.