A comparable has adjustments of +$15,000 and −$8,000. What is its net adjustment?
Correct Answer
B) $7,000
15000 − 8000 = +7000. A positive net adjustment is not a conclusion that the comparable is superior overall. Common errors: reporting the gross adjustment instead of the net gives $23,000; leaving out the −$8,000 adjustment gives $15,000; leaving out the +$15,000 adjustment gives −$8,000.
Why This Is the Correct Answer
Option B is correct because the signed net adjustment is +$15,000 + (−$8,000) = +$7,000. The negative adjustment offsets part of the positive one. A positive net adjustment means the comparable was adjusted upward on balance; it describes the total of the adjustments, not how reliable the comparable is.
Why the Other Options Are Wrong
Option A: −$8,000
Option A, −$8,000, leaves out the +$15,000 adjustment and reports only the negative one. Including both gives $15,000 − $8,000 = +$7,000.
Option C: $15,000
Option C, $15,000, leaves out the −$8,000 adjustment entirely. Including both gives $15,000 − $8,000 = +$7,000.
Option D: $23,000
Option D, $23,000, is the gross adjustment ($15,000 + $8,000 = $23,000), which ignores signs. The net adjustment keeps the signs: $15,000 − $8,000 = +$7,000.
Net nets out, gross grows
Net lets pluses and minuses cancel; gross adds all adjustments as positive amounts.
How to use: Use this whenever a question asks for net or gross adjustment from a list of signed adjustments.
Exam Tip
Check whether the question asks for net or gross before you add; the other figure is usually among the wrong options.
Common Mistakes to Avoid
- -Reporting gross adjustment when net is asked
- -Dropping one of the adjustments
- -Reporting only the negative adjustment
Concept Deep Dive
Analysis
This question tests the difference between net and gross adjustment. Net adjustment adds the signed adjustments together, so positive and negative amounts offset. Gross adjustment adds their absolute values.
Background Knowledge
On a sales comparison grid, net adjustment is the algebraic sum of all adjustments and gross adjustment is the sum of their absolute values. Both are often shown as percentages of sale price to gauge how much the comparable had to be changed.
Real-World Application
A comparable gets +$15,000 for a smaller lot difference and −$8,000 for an extra bathroom. The grid shows a net adjustment of +$7,000 and a gross adjustment of $23,000.
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