1
Certified Association Executive CAE Key
Terms - ASAE Exam 2025/2026 Exam
Questions and Answers | 100% Solved
Segregation of Duty - 🧠 ANSWER ✔✔No individual should control all 4 aspects
of a financial transaction.
Initiation (check request)
Authorization (approval to pay)
Asset custody (keeping the checkbook)
Recording transaction (posting)
Clean Audit - 🧠 ANSWER ✔✔An opinion that provides the *highest level of
assurance* that the:
-Statement of Financial Position
-Statement of Activities
-Statement of Cash Flows
are all fairly presented.
COPYRIGHT©NINJANERD 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE. PRIVACY
1
STATEMENT. ALL RIGHTS RESERVED
,2
Accounting Services Levels - 🧠 ANSWER ✔✔Audit (greatest level of assurance)
Review (limited scope - uncovers misstatements)
Compilation (no assurance of accuracy)
Sarbanes-Oxley - 🧠 ANSWER ✔✔The two provisions that impact non-profits are:
1. Whistle-blower protection
2. Prohibition of document destruction upon commencement of a federal
investigation
Management Letter - 🧠 ANSWER ✔✔A letter issued by an independent auditor
that communicates what levels that management needs to address in order to come
into compliance with GAAP accounting practices.
Statement of Activities - 🧠 ANSWER ✔✔Shows financial activity by month and
on a year-to-date basis.
Reports:
Revenue generated
Expenses incurred
Results in net income or net loss
COPYRIGHT©NINJANERD 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE. PRIVACY
2
STATEMENT. ALL RIGHTS RESERVED
, 3
Statement of Cash Flows - 🧠 ANSWER ✔✔Helps creditors determine ability to
generate future cash flow to meet obligations. Cash flow and ability to convert
assets into cash important to maintain financial flexibility.
Accrual-basis Accounting - 🧠 ANSWER ✔✔Recognizes revenues when earned
and expenses when incurred.
This is a best practice in association accounting. It gives a better picture than cash
accounting.
Allocate dues when earned monthly rather than lump sum when received.
Chart of Accounts - 🧠 ANSWER ✔✔Lists all the line item accounts being used.
Liquidity Ratio - 🧠 ANSWER ✔✔Measures ability to pay *short term
obligations*.
Current Ratio - 🧠 ANSWER ✔✔Total Current Assets / Total Current Liabilities
Profitability Ratio - 🧠 ANSWER ✔✔Profits / Losses (over a period of time).
Quick Ratio - 🧠 ANSWER ✔✔Measures the ability to pay current debts.
Current Assets (inventory and pre-paids) / Total Current Liabilities
COPYRIGHT©NINJANERD 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE. PRIVACY
3
STATEMENT. ALL RIGHTS RESERVED
Certified Association Executive CAE Key
Terms - ASAE Exam 2025/2026 Exam
Questions and Answers | 100% Solved
Segregation of Duty - 🧠 ANSWER ✔✔No individual should control all 4 aspects
of a financial transaction.
Initiation (check request)
Authorization (approval to pay)
Asset custody (keeping the checkbook)
Recording transaction (posting)
Clean Audit - 🧠 ANSWER ✔✔An opinion that provides the *highest level of
assurance* that the:
-Statement of Financial Position
-Statement of Activities
-Statement of Cash Flows
are all fairly presented.
COPYRIGHT©NINJANERD 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE. PRIVACY
1
STATEMENT. ALL RIGHTS RESERVED
,2
Accounting Services Levels - 🧠 ANSWER ✔✔Audit (greatest level of assurance)
Review (limited scope - uncovers misstatements)
Compilation (no assurance of accuracy)
Sarbanes-Oxley - 🧠 ANSWER ✔✔The two provisions that impact non-profits are:
1. Whistle-blower protection
2. Prohibition of document destruction upon commencement of a federal
investigation
Management Letter - 🧠 ANSWER ✔✔A letter issued by an independent auditor
that communicates what levels that management needs to address in order to come
into compliance with GAAP accounting practices.
Statement of Activities - 🧠 ANSWER ✔✔Shows financial activity by month and
on a year-to-date basis.
Reports:
Revenue generated
Expenses incurred
Results in net income or net loss
COPYRIGHT©NINJANERD 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE. PRIVACY
2
STATEMENT. ALL RIGHTS RESERVED
, 3
Statement of Cash Flows - 🧠 ANSWER ✔✔Helps creditors determine ability to
generate future cash flow to meet obligations. Cash flow and ability to convert
assets into cash important to maintain financial flexibility.
Accrual-basis Accounting - 🧠 ANSWER ✔✔Recognizes revenues when earned
and expenses when incurred.
This is a best practice in association accounting. It gives a better picture than cash
accounting.
Allocate dues when earned monthly rather than lump sum when received.
Chart of Accounts - 🧠 ANSWER ✔✔Lists all the line item accounts being used.
Liquidity Ratio - 🧠 ANSWER ✔✔Measures ability to pay *short term
obligations*.
Current Ratio - 🧠 ANSWER ✔✔Total Current Assets / Total Current Liabilities
Profitability Ratio - 🧠 ANSWER ✔✔Profits / Losses (over a period of time).
Quick Ratio - 🧠 ANSWER ✔✔Measures the ability to pay current debts.
Current Assets (inventory and pre-paids) / Total Current Liabilities
COPYRIGHT©NINJANERD 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE. PRIVACY
3
STATEMENT. ALL RIGHTS RESERVED
