What is the exam-ready answer?
| Roadmap post | 252 of 500 |
|---|---|
| Official syllabus topic | XI.A Calculations for Transactions: seller net, buyer funds, prorations, and transfer fees |
| Official PSI area | Real Estate Calculations |
| Published weight | 7% of the 100-question national portion |
| Source edition | PSI Georgia Candidate Information Bulletin dated July 1, 2026 |
| Content checked through | August 2, 2026 |
The Rule
PSI publishes a weight for the complete official area, not a guaranteed count for this individual calculation. Follow the stated facts, units, time basis, and rounding instruction.
Formula and variables
| Symbol or term | Meaning |
|---|---|
| Debit | An amount that increases what a party owes or reduces that party's proceeds |
| Credit | An amount that reduces what a party owes or increases that party's proceeds |
| Payment timing | Whether the item was paid in advance or remains unpaid in arrears |
Step-by-step method
- Identify the party, item, ownership period, and whether it is paid in advance or arrears.
- Ask who currently has the money or who will receive the future bill.
- Charge the party who owes the adjustment with a debit.
- Give the other party an equal credit.
- Place buyer acquisition funds, loan proceeds, deposits, and seller payoff or costs in their correct columns without forcing them into proration logic.
Georgia-specific distinction
Worked examples
Example 1: Unpaid taxes in arrears
Scenario. The seller's $1,500 share of current-year property taxes is unpaid, and the buyer will later receive the bill.
- Seller used the property during the allocated period.
- Buyer will face the bill after closing.
- Debit seller $1,500 and credit buyer $1,500.
Answer. Seller debit $1,500; buyer credit $1,500.
Reasonableness check. The entries balance and put money with the person who will pay the future bill.
Example 2: Rent collected in advance
Scenario. The seller collected $900 rent for days after closing that belong to the buyer.
- Seller currently holds money earned during the buyer's ownership period.
- Debit seller $900 and credit buyer $900.
Answer. Seller debit $900; buyer credit $900.
Reasonableness check. The buyer receives the income belonging to the buyer's period without collecting it twice from the tenant.
Common exam traps
- Memorizing that taxes always produce one direction without checking payment status
- Giving both parties a debit or both parties a credit for one proration
- Treating a buyer deposit as a new cash debit
- Assuming local custom overrides the allocation stated in the question
Original practice questions with detailed explanations
These original instructional questions map to the July 1, 2026 PSI outline. They are not copied from PSI or any live examination. Write the setup before opening the explanation.
Question 1Unpaid taxes attributable to the seller's ownership will be paid later by the buyer. What is the entry?
- A. Debit buyer, credit seller
- B. Debit seller, credit buyer
- C. Debit both
- D. Credit both
Show answer and explanation →
Answer: B. Debit seller, credit buyer
The seller owes for the seller period, while the buyer will receive the bill. Debit seller and credit buyer.
Question 2The seller prepaid an annual service and the buyer receives $600 of benefit after closing. What is the usual proration entry?
- A. Credit seller, debit buyer
- B. Debit seller, credit buyer
- C. Credit both
- D. No entry
Show answer and explanation →
Answer: A. Credit seller, debit buyer
The seller paid for the buyer's future benefit, so the buyer reimburses the seller: buyer debit and seller credit.
Question 3What must be true of a two-party proration entry on a balanced settlement statement?
- A. Both parties receive credits
- B. Both parties receive debits
- C. One debit equals the other credit
- D. The loan amount changes
Show answer and explanation →
Answer: C. One debit equals the other credit
The same adjustment transfers value between parties, so the debit and credit are equal.
Mastery tracking
Mark this calculation mastered only when every statement is true.
- I define debit and credit from each party's perspective.
- I determine whether an item is paid in advance or arrears.
- I can explain who holds the money and who used the benefit.
- I balance each two-party proration.
- I follow the stated contract facts instead of a memorized local custom.
Recommended next lesson
Continue with Percent, Decimal, and Fraction Conversions. Eliminate the conversion errors that corrupt otherwise correct setups.
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