CMCA Budget, Reserves, Investments
and Assessments Pre Test
b. revenue correct answersWhat is the collective items or amounts of
income which are appropriated for common expenses?
a. expenses
b. revenue
c. assessment
d. zero-based budgeting
c. board treasurer correct answersWho is responsible for putting together
the budget each year?
e. manager
f. board president
g. board treasurer
h. finance committee
1. b. zero-base budgeting
2.a. historical trend budgeting correct answersIDENITFY THE
EXPENSE CALCULATION METHODS
1.All line items are set to zero and the amount of funds allotted to
each must be justified.
2.This method begins with the assumption that existing line items are
needed. The amount of funds allotted to each during the current year is
adjust for expected changes in the coming year.
a. historical trend budgeting
b. zero-base budgeting
1. a. discretionary line items
2.d. mandatory line items correct answersIDENTIFY THE TWO
TYPES OF EXPENDITURES IN A BUDGET
3.Items based on owner, board, and committee desires. They are items
people would like to have. They can also be voted out of the budget.
, 2.Items based on community and owner needs and requirements that the
community is obligated to meet.
a. discretionary line items
b. reserve study
c. assessment
d. mandatory line items
TRUE correct answersTRUE OR FALSE
An example of a discretionary line item in the annual budget is the
purchase of a snow melter.
TRUE correct answersTRUE OR FALSE
An example of a mandatory line item in the annual budget are utility costs.
1. c. Operating expenses
2. a. Major improvement expenses
3.b. Reserve account correct answersMATCH THE DIFFERENT
TYPES OF EXPENSES
3. For the normal and usual repairs for the association.
4.Items added to improve the quality of life, appearance of the
property, or enhance property values.
5. Used to pay for long-term repair and maintenance issues.
a. Major improvement expenses
b. Reserve account
c. Operating expenses
1. c. Assessment
2. a. Total annual assessment
3. b. Special assessment correct answersMATCH THE TYPES OF REVENUE
6.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.
7. Amount of income that the board decides to obtain from owner
assessments.
8.A one-time assessment often voted on by the owners to cover a major
expense that was not included in the annual budget or replacement
reserve.
a. Total annual assessment
, b. Special assessment
c. Assessment
b. Special assessment correct answersThe Club spent over $400,000 in
snow removal this year. They only budgeted $50,000. What type of
assessment will the board of directors levy?
a. Total annual assessment
b. Special assessment
c. Assessment
FALSE
Yearly correct answersTRUE OR FALSE
Acceleration is the collection of all assessments due on a monthly basis.
b. More accurately reflects the association's financial condition.
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 miscellaneous
income accounts, and some expenses, such as miscellaneous repairs, are
maintained on a cash basis. The accrual of major expenses in particular, such
as a contract for landscaping, trash remove, etc., regardless of non-receipt of
invoices, give 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. correct answersThe best
reasoning for recommending the modified accrual accounting method is that,
compare to cash accounting, it:
d. Will make future audit work accurate.
e. More accurately reflects the association's financial condition.
f. Is more easily understood by board members.
g. Can be accomplished more quickly.
1. b. percentage method
2.a. equal method computation correct answersIDENTIFY THE TWO
WAYS TO CALCULATE ASSESSMENTS
1. Uses the assigned percentage to determine each own'er prorata
share.
2. Assesses each owner equally for each lot or unit.
a. equal method computation
b. percentage method
and Assessments Pre Test
b. revenue correct answersWhat is the collective items or amounts of
income which are appropriated for common expenses?
a. expenses
b. revenue
c. assessment
d. zero-based budgeting
c. board treasurer correct answersWho is responsible for putting together
the budget each year?
e. manager
f. board president
g. board treasurer
h. finance committee
1. b. zero-base budgeting
2.a. historical trend budgeting correct answersIDENITFY THE
EXPENSE CALCULATION METHODS
1.All line items are set to zero and the amount of funds allotted to
each must be justified.
2.This method begins with the assumption that existing line items are
needed. The amount of funds allotted to each during the current year is
adjust for expected changes in the coming year.
a. historical trend budgeting
b. zero-base budgeting
1. a. discretionary line items
2.d. mandatory line items correct answersIDENTIFY THE TWO
TYPES OF EXPENDITURES IN A BUDGET
3.Items based on owner, board, and committee desires. They are items
people would like to have. They can also be voted out of the budget.
, 2.Items based on community and owner needs and requirements that the
community is obligated to meet.
a. discretionary line items
b. reserve study
c. assessment
d. mandatory line items
TRUE correct answersTRUE OR FALSE
An example of a discretionary line item in the annual budget is the
purchase of a snow melter.
TRUE correct answersTRUE OR FALSE
An example of a mandatory line item in the annual budget are utility costs.
1. c. Operating expenses
2. a. Major improvement expenses
3.b. Reserve account correct answersMATCH THE DIFFERENT
TYPES OF EXPENSES
3. For the normal and usual repairs for the association.
4.Items added to improve the quality of life, appearance of the
property, or enhance property values.
5. Used to pay for long-term repair and maintenance issues.
a. Major improvement expenses
b. Reserve account
c. Operating expenses
1. c. Assessment
2. a. Total annual assessment
3. b. Special assessment correct answersMATCH THE TYPES OF REVENUE
6.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.
7. Amount of income that the board decides to obtain from owner
assessments.
8.A one-time assessment often voted on by the owners to cover a major
expense that was not included in the annual budget or replacement
reserve.
a. Total annual assessment
, b. Special assessment
c. Assessment
b. Special assessment correct answersThe Club spent over $400,000 in
snow removal this year. They only budgeted $50,000. What type of
assessment will the board of directors levy?
a. Total annual assessment
b. Special assessment
c. Assessment
FALSE
Yearly correct answersTRUE OR FALSE
Acceleration is the collection of all assessments due on a monthly basis.
b. More accurately reflects the association's financial condition.
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 miscellaneous
income accounts, and some expenses, such as miscellaneous repairs, are
maintained on a cash basis. The accrual of major expenses in particular, such
as a contract for landscaping, trash remove, etc., regardless of non-receipt of
invoices, give 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. correct answersThe best
reasoning for recommending the modified accrual accounting method is that,
compare to cash accounting, it:
d. Will make future audit work accurate.
e. More accurately reflects the association's financial condition.
f. Is more easily understood by board members.
g. Can be accomplished more quickly.
1. b. percentage method
2.a. equal method computation correct answersIDENTIFY THE TWO
WAYS TO CALCULATE ASSESSMENTS
1. Uses the assigned percentage to determine each own'er prorata
share.
2. Assesses each owner equally for each lot or unit.
a. equal method computation
b. percentage method
