California Real Estate Practice Exam

What is the normal time frame used to calculate prorations?

1. 12-month year with months of 30 days each

2. Calendar year

3. Fiscal year

4. 10-month year with months of 30 days each

The correct answer is: 12-month year with months of 30 days each

A proration is a method used to determine a proportional amount from a set time frame. The normal time frame used for prorations is based on a 12-month year with months of 30 days each, also known as a 360-day year. This is because it simplifies calculations and is a common practice in financial and accounting scenarios. The other options, such as the calendar year and fiscal year, have different lengths and could result in inaccurate calculations. Using a 10-month year would also not accurately reflect a full year's time frame. Therefore, option A is the best choice for calculating prorations.