What is the exam-ready answer?
| Roadmap lesson | 159 of 500 |
|---|---|
| Official syllabus topic | Finance and Closing: Closing Procedures |
| Official PSI group | Finance and Closing |
| Published group count | 15 of the 52 Georgia questions |
| Exam portion | Georgia salesperson supplement |
| Source edition | PSI Georgia Candidate Information Bulletin dated July 1, 2026 |
| Law checked through | August 2, 2026 |
| Last verified | August 2, 2026 |
The Rule
PSI publishes 16, 21, and 15 items for the three Georgia groups. It does not publish a guaranteed subtopic count. The statute, current GREC rule, contract, or other cited primary authority controls each lesson.
Complete lesson
Read these concepts as one Georgia decision system. A plausible national rule can still be the wrong answer when the stem supplies a Georgia statute, instrument, role, or procedure.
Debits and credits
A buyer debit increases buyer funds due; a buyer credit reduces them. A seller debit reduces proceeds; a seller credit increases them.
Major buyer entries
Purchase price and buyer-paid costs are debits, while loan proceeds, deposit, seller credit, and qualifying adjustments are credits.
Major seller entries
Sale price is a seller credit. Payoffs, seller-paid costs, commissions, taxes, and agreed credits commonly debit seller proceeds.
Proration
Determine the annual or periodic amount, daily or monthly convention, responsible days, and whether the item was prepaid or remains unpaid.
Decision rule
Georgia rule and national contrast
Worked Georgia example
Scenario. The seller prepaid a full year of property tax, and the buyer will own the property for the remainder of that year after closing.
Reason it through. The buyer reimburses the seller for the buyer's ownership period. That is a buyer debit and seller credit for the prorated amount.
Answer. Debit the buyer and credit the seller for the buyer's share of the prepaid tax.
Common exam traps
- Using debit as always bad for both parties
- Ignoring prepaid versus unpaid
- Counting from the wrong date
- Confusing deposit with an extra charge
Original practice questions with detailed explanations
These are original instructional questions mapped to the July 1, 2026 PSI outline. They are not copied from PSI or a live examination. Choose an answer before opening the explanation.
Question 1Which statement best states the Georgia rule for Closing Statements, Debits, Credits, Prorations, and Funds?
- A. Every debit decreases cash due from the buyer.
- B. A buyer deposit is added again as a buyer debit at closing.
- C. Prepaid and unpaid taxes receive identical proration entries.
- D. For every line, identify the party, reason, time period, prepaid or unpaid status, and whether the entry increases or decreases that party's closing balance.
Show answer and explanation →
Answer: D. For every line, identify the party, reason, time period, prepaid or unpaid status, and whether the entry increases or decreases that party's closing balance.
The correct choice states the controlling rule. The other choices either remove a required element, replace Georgia authority with a generic assumption, or expand an exception beyond the cited source.
Question 2The seller prepaid a full year of property tax, and the buyer will own the property for the remainder of that year after closing.
- A. Debit the buyer and credit the seller for the buyer's share of the prepaid tax.
- B. Ignore the Georgia-specific fact because good intentions control.
- C. Apply the nearest national rule without checking Georgia authority.
- D. Let the participant with the strongest preference decide without following the required process.
Show answer and explanation →
Answer: A. Debit the buyer and credit the seller for the buyer's share of the prepaid tax.
The buyer reimburses the seller for the buyer's ownership period. That is a buyer debit and seller credit for the prorated amount. The correct option follows that reasoning. The distractors ignore the controlling Georgia source, substitute intent for procedure, or give decision-making authority to the wrong person.
Question 3When solving Closing Statements, Debits, Credits, Prorations, and Funds, what should a candidate identify first?
- A. The answer choice that sounds most ethical, without classifying the actor or document.
- B. Do not memorize one party's entry in isolation. Ask who owes whom for what period and whether the item has already been paid.
- C. One familiar deadline, applied to every Georgia transaction regardless of the source.
- D. A national default, even when the stem identifies a Georgia statute or GREC rule.
Show answer and explanation →
Answer: B. Do not memorize one party's entry in isolation. Ask who owes whom for what period and whether the item has already been paid.
The decision rule identifies the facts that control this topic. The other choices reward tone, a memorized number, or a national default while skipping the Georgia actor, document, authority, or procedure.
Mastery tracking
Mark this Georgia lesson mastered only when every statement is true.
- State the direct answer and decision rule without notes.
- Explain all four concepts and identify the controlling Georgia source.
- Solve the worked example after changing one important fact.
- Reject every listed trap and explain what makes it tempting.
- Answer all three original questions correctly and explain every distractor.
- Repeat this topic in mixed Georgia practice on a later day.
Recommended next lesson
Continue with Georgia Transfer Tax and Intangible Recording Tax. Continue through the roadmap from lesson 159.
Return to the Finance and Closing hub for the complete official branch and every canonical lesson in this Georgia group.