Exam (elaborations)
CMCA Practice Exam Terms Questions Exams Questions and Answers (2022/2023) (Verified Answers)
CMCA Practice Exam Terms Questions Exams Questions and Answers (2022/2023) (Verified Answers)
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CMCA Practice Exam Terms Questions1. Statement of Revenue and Expense: 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.
2. Your association just completed the eighth month of its fiscal year.
Which financial report would be most useful to project year end
expenses?: State- ment of Revenue and Expense
3. The best reasoning for recommending the modified accrual accounting
1/
,method is that, compared to cash accounting, it:: More accurately
reflects the associations financial condition
4. Modified Cash Basis: Under the modified accrual basis, also
sometimes re- ferred 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
5. Community association managers must be familiar with Federal income
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, tax requirements and options because:: Under the Federal tax code, all
orga- nizations are taxable on their income unless specifically
exempted
6. What are the two essential financial documents the board of directors
should use to determine the amount of funds available for an
unbudgeted expense?: Balance sheet and statement of revenue and
expense
7. Balance Sheet and Statement of Revenue and Expense: 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
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