CMCA UPDATED CORE EXAM TEST QUESTIONS AND
SOLUTIONS GRADED A+
✔✔Master association - ✔✔an organization of homeowners in a large condominium or
planned unit development which includes representatives from other, smaller
homeowner organizations.
✔✔Mixed use development - ✔✔A development which is designed to mix two or more
"uses" of land together
✔✔Public offering statement - ✔✔a disclosure statement prepared by a developer that
contains all material facts a property offered for sale and that must be provided to a
prospective purchaser in accordance with applicable state or federal law.
✔✔Section 3: Budgets, Reserves, Investments, and Assessments/ Section 4: Financial
Controls - ✔✔
✔✔Chapter 7 bankruptcy - ✔✔called straight bankruptcy or liquidation. It involves the
prompt conversion of all individual's or corporation's non-exempt property to cash, and
payment of creditors to the extent possible
✔✔Statement of income and expense - ✔✔records the community association's
financial transactions during a given period of time- generally for a given month plus the
fiscal year to date.
✔✔GAAP - ✔✔Provide additional information to help the reader understand the
community association's financial situation and provide uniformity among reports from
different organizations.
✔✔Cash basis of accounting - ✔✔records income when it is collected and expenses
when they are paid
✔✔Bad debt write off - ✔✔the write-off consists of recording an uncollectible debt as an
expense that the association must absorb. usually requires resolution of the board
✔✔Lien - ✔✔is a legal claim by one party on the property of another to obtain the
payment of a debt or the satisfaction of an obligation. Protects the community
association's interest
✔✔investment yield - ✔✔simply the return received on the investment
✔✔chapter 11 bankruptcy - ✔✔called a reorganization because it is designed to allow
for an orderly payment to creditors that enable a corporation to continue
, ✔✔Modified cash basis of accounting - ✔✔records income and expenses on a cash
basis with selected item recorded an accrual basis
✔✔Personal money judgment - ✔✔a decision by a judge to allow the community
association to calling the owner's personal property to a settle a delinquent account
✔✔Foreclosure - ✔✔a legal proceeding filled in court whereby a party with a claim
against an owner can claim the ownership of the unit involved in order to recover the it
is owed.
✔✔Assets - ✔✔include anything owned that is has value. the actual land and buildings
of the community association are not generally shown as assets
✔✔Chapter 13 bankruptcy - ✔✔used to reorganize personal or non-corporate debt. A
plan is submitted to a judge for paying off all or nearly all of the debt over a specified
period of time.
✔✔Acceleration - ✔✔is the owner's financial obligation to the community association
during a given period of time. It covers the owner's share of the common expense, also
known as "common expense liabilities" in some states.
✔✔Fair Debt Collection Practice Act - ✔✔Requires that the person who owes a debt
receive written notice
✔✔Assessment - ✔✔the collection of all assessments due through the end of the fiscal
year.
✔✔Statement of cash flow - ✔✔summary of the flow of funds not and out of the
community association prepared for normal operations, investment activities, and any
borrowing activities.
✔✔Accrual basis of accounting - ✔✔records the income when it is earned and
expenses when they are incurred or acquired
✔✔Representation letter - ✔✔a letter from the CPA that states that the information the
community association provides is true to the best of its knowledge.
✔✔Audit - ✔✔An examination of the accounting records and procedures of an
organization by a CPA for the purpose of verifying the accuracy and completeness of
financial records.
✔✔Compilation - ✔✔a presentation of financial statement by a CPA without the
assurance that the information conforms to GAAP
SOLUTIONS GRADED A+
✔✔Master association - ✔✔an organization of homeowners in a large condominium or
planned unit development which includes representatives from other, smaller
homeowner organizations.
✔✔Mixed use development - ✔✔A development which is designed to mix two or more
"uses" of land together
✔✔Public offering statement - ✔✔a disclosure statement prepared by a developer that
contains all material facts a property offered for sale and that must be provided to a
prospective purchaser in accordance with applicable state or federal law.
✔✔Section 3: Budgets, Reserves, Investments, and Assessments/ Section 4: Financial
Controls - ✔✔
✔✔Chapter 7 bankruptcy - ✔✔called straight bankruptcy or liquidation. It involves the
prompt conversion of all individual's or corporation's non-exempt property to cash, and
payment of creditors to the extent possible
✔✔Statement of income and expense - ✔✔records the community association's
financial transactions during a given period of time- generally for a given month plus the
fiscal year to date.
✔✔GAAP - ✔✔Provide additional information to help the reader understand the
community association's financial situation and provide uniformity among reports from
different organizations.
✔✔Cash basis of accounting - ✔✔records income when it is collected and expenses
when they are paid
✔✔Bad debt write off - ✔✔the write-off consists of recording an uncollectible debt as an
expense that the association must absorb. usually requires resolution of the board
✔✔Lien - ✔✔is a legal claim by one party on the property of another to obtain the
payment of a debt or the satisfaction of an obligation. Protects the community
association's interest
✔✔investment yield - ✔✔simply the return received on the investment
✔✔chapter 11 bankruptcy - ✔✔called a reorganization because it is designed to allow
for an orderly payment to creditors that enable a corporation to continue
, ✔✔Modified cash basis of accounting - ✔✔records income and expenses on a cash
basis with selected item recorded an accrual basis
✔✔Personal money judgment - ✔✔a decision by a judge to allow the community
association to calling the owner's personal property to a settle a delinquent account
✔✔Foreclosure - ✔✔a legal proceeding filled in court whereby a party with a claim
against an owner can claim the ownership of the unit involved in order to recover the it
is owed.
✔✔Assets - ✔✔include anything owned that is has value. the actual land and buildings
of the community association are not generally shown as assets
✔✔Chapter 13 bankruptcy - ✔✔used to reorganize personal or non-corporate debt. A
plan is submitted to a judge for paying off all or nearly all of the debt over a specified
period of time.
✔✔Acceleration - ✔✔is the owner's financial obligation to the community association
during a given period of time. It covers the owner's share of the common expense, also
known as "common expense liabilities" in some states.
✔✔Fair Debt Collection Practice Act - ✔✔Requires that the person who owes a debt
receive written notice
✔✔Assessment - ✔✔the collection of all assessments due through the end of the fiscal
year.
✔✔Statement of cash flow - ✔✔summary of the flow of funds not and out of the
community association prepared for normal operations, investment activities, and any
borrowing activities.
✔✔Accrual basis of accounting - ✔✔records the income when it is earned and
expenses when they are incurred or acquired
✔✔Representation letter - ✔✔a letter from the CPA that states that the information the
community association provides is true to the best of its knowledge.
✔✔Audit - ✔✔An examination of the accounting records and procedures of an
organization by a CPA for the purpose of verifying the accuracy and completeness of
financial records.
✔✔Compilation - ✔✔a presentation of financial statement by a CPA without the
assurance that the information conforms to GAAP
