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CAE Candidate Prep Terms with 100% correct answers
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CAE Candidate Prep TermsAccrual Basis Accounting - ANS-Recognizes revenues when earned and expenses
when incurred
Accounts Receivable - ANS-An asset, the amount of cash still due to the association
when it sells an item to an outside entity who agrees to pay later.
Prepaid Expense - ANS-An asset, an amount the association has paid currently for an
item or service which will be used in the future (e.g. prepaid insurance, prepaid rent)
Accounts Payable - ANS-A liability, the amount of cash the association still owes when it
incurs a cost or buys an item now but will pay later
Unearned Revenues: Also deferred revenue - ANS-A liability, payments received in
advance for goods or services to be provided in the future (e.g. dues received at the
end of the current year for the following year).
Cash Basis Accounting - ANS-Recognizes revenue when received and expenses when
paid
Assets - ANS-What an association owns; e.g. cash on hand, accounts receivable,
product inventory (educational publications and program materials), equipment,
furniture, real estate, and investments
Liabilities - ANS-Financial obligations owed to creditors, claims on assets, loans,
accounts payable, taxes, unearned or deferred dues and other revenue
Current Liabilities - ANS-Obligations due within the coming year
Long-term Liabilities - ANS-Debts with maturity dates longer than a year
Other Liabilities - ANS-Any liability not classified as current or long-term
Notes Payable - ANS-Secured debt; i.e. building loan
Net Assets - ANS-Financial net worth, net equity or reserves. Assets â€" Liabilities =
Net Assets
,What is GAAP? - ANS-generally accepted accounting methods.
Four Internal Financial Control - ANS-Don't have same person do all (clear lines) clear
lines of authority; Give authority with responsibility; Acceptance of responsibility;
Training is key
Policies - ANS-spell out standards of conduct and decision making; articulate the
strategy and philosophy of governing body; provide framework upon which the
association builds its procedures. Developed and adopted by volunteer leaders
Procedures - ANS-delineate how to administer the policy; the steps needed to turn
concept into reality. Can be developed both by volunteers and staff; staff implements
procedures as part of association’s operations.
Association policies and procedures generally addresses which (3) three areas? -
ANS-governance; management and operations; and public image and public policy
Three key elements characterize a strong national/chapter relationship: - ANS-clarity of
the role and purpose, open communication, and mutual commitment.
Difference between subsidiaries vs affiliates - ANS-Subsidiaries are owned; affiliates are
independent corporations.
Reasons associations form subsidiaries - ANS-Allow the association to engage in
activities not permitted by its purpose, charter, or bylaws. Offer services to niche
markets. Addl revenue sources. Increase the assoc capacities & scope. Protect the
association financial & tax liability.
Trade associations - ANS-501(c)(6)organization; composed of individuals or firms
concerned with a single product or service or those concerned with a number of related
products or services
Professional associations - ANS-an association of individuals with an acquired
knowledge and experience that qualifies them as specialists, or sharing a field of
business or practice in a profession (medical, legal, individual membership assoc)
What is a horizontal association? - ANS-servicing one functional level of an industry,
profession, or field
What is a vertical association? - ANS-all functional levels.
, Chambers of commerce and other business clubs - ANS-engaged in all kinds of
business activities in a defined geographical area
Federations - ANS-associations are composed not of individual members but of other
associations
Bylaws - ANS-the main internal rules for association management and government
Articles of Incorporation - ANS-An agreement between the state that grants
incorporated status and the association that holds that status
Hierarchy of Documents - ANS-Articles of Incorporation, Bylaws, Policies, Procedures,
Practice
Statement of Purpose - ANS-The most important statement of the purposes of the
association is that given in the articles of incorporation
CSE Role - ANS-directs an associations staff and operations, with feedback from
volunteers.
CEO Role - ANS-Elected or appointed leaders set direction and establish policies, with
input from and advice of staff.
Strategic management - ANS-what you do now to achieve your vision of the future
Four Steps in Strategic Mgmt - ANS-Strategic thinking, planning, implementation and
evaluation & feedback (SPIE)
Strategic Thinking - ANS-assesses the future effects of outside force. Key component is
gathering info an opinions from important constituencies
Strategic planning - ANS-creates the associations future. Includes developing a vision
and identifying what the assn needs to do today to achieve the vision.
Strategic implementation - ANS-translates the strategic plan into detailed programs and
budgets (the work plan) and evaluates them to ensure they meet customer needs
External environment - ANS-the world outside the association
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