CMCA Practice Exam Terms/Questions & Answers(GRADED A)
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Course
CMCA
Institution
CMCA
Statement of Revenue and Expense - ANSWER This report shows the activity over a period of time & therefore will indicate the amount of income received & expenses incurred, whether actual or accrued, for all activity of the association through the 8 months of the fiscal year. The report may also sho...
CMCA Practice Exam Terms/Questions &
Answers(GRADED A)
Statement of Revenue and Expense - ANSWER This report shows the activity over a
period of time & therefore will indicate the amount of income received & expenses
incurred, whether actual or accrued, for all activity of the association through the 8
months of the fiscal year. The report may also show the amount of money in each
budgeted line item for the entire year & amount remaining in each line for the last 4
months of the year.
Your association just completed the eighth month of its fiscal year. Which financial
report would be most useful to project year end expenses? - ANSWER Statement of
Revenue and Expense
The best reasoning for recommending the modified accrual accounting method is that,
compared to cash accounting, it: - ANSWER More accurately reflects the associations
financial condition
Modified Cash Basis - ANSWER Under the modified accrual basis, also sometimes
referred to as modified cash basis, some accounts, such as assessment income are
maintained on the accrual basis and other accounts, such as interest or other misc.
income accounts and some expenses such as repairs, are maintained on a cash basis.
The accrual of major expenses in particular, such as a contract for landscaping, trash
removal, etc. regardless of non-receipt of invoices, gives the reader a much more
accurate depiction of the association's financial standing, as the accruals serve to alert
the reader to the recognition of obligations that the association must meet
Community association managers must be familiar with Federal income tax
requirements and options because: - ANSWER Under the Federal tax code, all
organizations are taxable on their income unless specifically exempted
What are the two essential financial documents the board of directors should use to
determine the amount of funds available for an unbudgeted expense? - ANSWER
Balance sheet and statement of revenue and expense
Balance Sheet and Statement of Revenue and Expense - ANSWER Shows the amount
of money on hand in all association accounts as well as the allocated reserves at a
given point in time; the statement of revenue and expense shows the activity in all
budgeted line items over a period of time. Together, these reports can be used to
determine expenses to date and funds available for the future
Cash Basis - ANSWER Income is recorded or recognized when received and expenses
are recorded or recognized when they are actually paid
, On what basis is the community association reporting its finances when the financial
reports indicate income when received and expenses when paid? - ANSWER Cash
basis
Which tool is the most effective for defining the employee's duties? - ANSWER Job
description
Job Description - ANSWER Where the duties of a specific job is defined
What is the primary source of requirements when developing the association's annual
maintenance budget? - ANSWER Governing documents
Governing Documents - ANSWER Give notice requirements and budget cap
information
Which method is the best alternative to increasing assessments? - ANSWER Increasing
income by charging higher user fees (will provide consistent, sustainable increase in
operating revenues)
When the Board reviews the proposed budget for approval, what should it consider? -
ANSWER The financial position of the association (budget should be set to meet
operational needs)
Which type of maintenance should be managed with a routine maintenance contract? -
ANSWER cutting grass (fits routine maintenance description)
Which of the following is a common management control for ensuring maintenance
work is performed in a timely manner? - ANSWER A work order/response form
The primary management control tool for identifying whether the association needs to
maintain a particular property element is: - ANSWER Maintenance responsibility chart
Maintenance Responsibility Chart - ANSWER Along with the governing documents,
defines parameters of association maintenance responsibility
To determine which physical assets must be maintained by the association, the
manager should - ANSWER Review the association governing documents
Governing Documents - ANSWER Outlines the things that must be undertaken by the
association on a maintenance level. The rules of the organization. They include federal
law, state law, corporate charter, articles of incorporation, constitution, bylaws, rules of
order, standing rules, and policies and procedures.
Work Order - ANSWER Assigns maintenance tasks (captures the work that needs to be
done and assigns the work to the appropriate staff member)
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