Financial Management Domain (Updated Domain 2025)
Study online at https://quizlet.com/_4c6vjo
1. Liabilities Liabilities consist of what is owed to others or collected in advance (e.g. owner
assessments received prior to the billed month).
2. Members' equity Members' equity is called the fund balance under the fund method of reporting. It
equals the difference between the community association's assets and liabilities.
3. Modified cash ba- This method records income and expenses on a cash basis with selected items
sis of accounting recorded on an accrual basis. Modified cash varies in format depending on the
number of items accrued.
4. Net income Net income is the amount left after deducting expenses from income.
5. Net loss A net loss occurs when expenses are greater than income.
6. Notes to financial The notes accompany the CPA-prepared financial statements. These footnotes
statements provide additional information to help the reader understand the community
association's financial situation.
7. Representation A letter from the CPA that states that the information the community association
letter provides is true to the best of its knowledge.
8. Statement of This is a summary of the flow of funds into and out of the community association.
cash flows Summaries are prepared for normal operations, investment activities, and any
borrowing activities.
9. Statement of in- This report records the community association's financial transactions during a
come and ex- given period of time—generally for a given month plus the fiscal year to date.
pense It is a way to keep track of the community's financial activity.
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, Financial Management Domain (Updated Domain 2025)
Study online at https://quizlet.com/_4c6vjo
10. Treasury bills Treasury bills are short-term instruments that mature in 13, 26, or 52 week periods.
They are issued in minimum denominations of $10,000. Anything larger must be in
$5,000 increments. As soon as one is purchased, the buyer receives the promised
earnings. Then, when the bill matures, the buyer receives the face value (value
indicated in the wording of the T-bill).
11. Treasury bonds Treasury notes mature in one to 10 years. Treasury bonds mature in more than
10 years. Both notes and bonds are issued in denominations from $1,000 to
$100,000. They are also interest-bearing with interest paid every six months. When
the note or bond matures, the buyer receives the full face value.
12. Accrual basis of This method records income when it is earned (or assessed to owners) and
accounting expenses when they are incurred or acquired.
13. Assets Assets include anything owned that has value. Unlike commercial businesses,
however, the actual land and buildings of the community association are not
generally shown as an asset.
14. 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.
15. Balance sheet A balance sheet is a summary of a community's financial position at a specific point
in time.
16. Cash basis of ac- This method records income when it is collected and expenses when they are paid.
counting
17. Certificate of de- When a CD is reinvested together with its accumulated interest, the ultimate yield
posit will be higher than the stated rate of interest.
18. Commercial re-
porting method
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Study online at https://quizlet.com/_4c6vjo
1. Liabilities Liabilities consist of what is owed to others or collected in advance (e.g. owner
assessments received prior to the billed month).
2. Members' equity Members' equity is called the fund balance under the fund method of reporting. It
equals the difference between the community association's assets and liabilities.
3. Modified cash ba- This method records income and expenses on a cash basis with selected items
sis of accounting recorded on an accrual basis. Modified cash varies in format depending on the
number of items accrued.
4. Net income Net income is the amount left after deducting expenses from income.
5. Net loss A net loss occurs when expenses are greater than income.
6. Notes to financial The notes accompany the CPA-prepared financial statements. These footnotes
statements provide additional information to help the reader understand the community
association's financial situation.
7. Representation A letter from the CPA that states that the information the community association
letter provides is true to the best of its knowledge.
8. Statement of This is a summary of the flow of funds into and out of the community association.
cash flows Summaries are prepared for normal operations, investment activities, and any
borrowing activities.
9. Statement of in- This report records the community association's financial transactions during a
come and ex- given period of time—generally for a given month plus the fiscal year to date.
pense It is a way to keep track of the community's financial activity.
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, Financial Management Domain (Updated Domain 2025)
Study online at https://quizlet.com/_4c6vjo
10. Treasury bills Treasury bills are short-term instruments that mature in 13, 26, or 52 week periods.
They are issued in minimum denominations of $10,000. Anything larger must be in
$5,000 increments. As soon as one is purchased, the buyer receives the promised
earnings. Then, when the bill matures, the buyer receives the face value (value
indicated in the wording of the T-bill).
11. Treasury bonds Treasury notes mature in one to 10 years. Treasury bonds mature in more than
10 years. Both notes and bonds are issued in denominations from $1,000 to
$100,000. They are also interest-bearing with interest paid every six months. When
the note or bond matures, the buyer receives the full face value.
12. Accrual basis of This method records income when it is earned (or assessed to owners) and
accounting expenses when they are incurred or acquired.
13. Assets Assets include anything owned that has value. Unlike commercial businesses,
however, the actual land and buildings of the community association are not
generally shown as an asset.
14. 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.
15. Balance sheet A balance sheet is a summary of a community's financial position at a specific point
in time.
16. Cash basis of ac- This method records income when it is collected and expenses when they are paid.
counting
17. Certificate of de- When a CD is reinvested together with its accumulated interest, the ultimate yield
posit will be higher than the stated rate of interest.
18. Commercial re-
porting method
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