Exam (elaborations)
M100 Module 2: Lesson 3: Financial Statements QUESTIONS AND ANSWERS 100% CORRECT
- Course
- Institution
M100 Module 2: Lesson 3: Financial Statements QUESTIONS AND ANSWERS 100% CORRECT
[Show more]
Content preview
M100 Module 2: Lesson 3: Financial StatementsQUESTIONS AND ANSWERS 100% CORRECT
What are two primary purposes of financial reports? - ANSWER - To provide
their internal & external users with the information needed to make appropriate
decisions on behalf of or regarding the community association
- to enable the community association board and manager to control the
community's financial operations.
Three Accounting Methods - ANSWER 1) Cash Basis- This method records
revenue when it is collected and expenses when they are paid
2) Accrual Basis- This method records revenue when it is earned (or accessed to
owners) and expenses when they are incurred.
3) Modified Cash Basis: This method records revenue on the accrual basis and
expenses on a cash basis with selected items recorded on an accrual basis. (aka
modified accrual) most com,on type
Statement of Revenue & Expenses - ANSWER A financial statement showing
how much the organization makes or loses during a given reporting period; Also
called earnings report; income statement; profit and loss statement; statement of
operations
Three major components of a statement of revenue and expense: - ANSWER a)
Revenue: the earnings of the community association
- Cash basis- revenues received and deposited
, - Accrual basis- revenues earned including assessments from owners but not
received yet
- modified cash basis- revenue is recorded on the accrual basis.
b) Expenses- cost of goods and services used to operate and maintain the
community's property
- cash- amounts paid
- accrual- amounts incurred whether or not
paid
-modified cash basis- generally reported on a
cash basis
c) Excess Revenue over Expense- amount left after deducting revenue into
income.
Loss - ANSWER expenses are greater than income
Balance Sheet - ANSWER summary of a community's financial position at a
specific point of time; balances what the community association owns (assets),
what it owes to others
e.g. typically prepared every month to monitor associations expenses
Three major components of the balance sheet - ANSWER - Assets- anything
owed that has value e.g. property is not considered and asset.
- Liabilities- consist of what is owed to others or collected in advance
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller StudySet. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $9.99. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
77254 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now