CMCA EXAM 2 CERTIFICATION EVALUATION
EXAMS 2026 COMPLETE QUESTIONS AND
ANSWERS GUARANTEED TO PAS
◉ chart of accounts Answer: an organized list of titles, descriptions
and assigned numbers of all categories in an organization's general
ledger; the assigned number helps you locate the account and the
title describes the category
◉ discretionary budget line items Answer: items based on owner,
board and committee desires; they are items people would like to
have—given their values, lifestyle, and preferred level of service (e.g.
social and recreational expenses, and picnic areas)
◉ expenses Answer: the cost of goods and services used to operate
and maintain the community's property
◉ FHA (Federal Housing Administration) Answer: regulates and
influences such items as the amount of insurance a community
association must carry, procedures for financial operations and
requirements for the upkeep of property
,◉ FHLMC (Federal Home Loan Mortgage Corporation) Answer: buys
mortgages from lenders and in doing so require certain types of
insurance to be in place
◉ FNMA (Federal National Mortgage Association) Answer: federally
established secondary mortgage institution that may set
requirements that your community association will have to meet if
owners are to participate in their financing programs
◉ full funding Answer: the goal of this strategy is to attain and
maintain the reserves at or near 100% as called for on the
component inventory
◉ historical and trend budgeting Answer: this method begins with
the assumption that existing line items are needed; the amount of
funds allotted to each during the current year is adjusted for
expected changes in the coming year
◉ major improvement expenses Answer: consist of items that are
not necessarily required, but are added to improve the overall
welfare, safety or life of the residents—or to enhance the value of
the community association as reflected in the resale value of units
◉ operating budget Answer: the financial plan devoted to day-to-day
activities includes operational expenses and major improvement
expenses—but not the replacement fund
,◉ operating expenses Answer: those items that occur on a regular
basis—day to day, week to week, month to month, and year to year
◉ reconciliation of expenses and revenue Answer: after you draft
both your operating and replacement fund budgets for the coming
year, you must settle your estimated expenses with your
community's anticipated revenue; to bring together after a
difference
◉ replacement fund Answer: consists of money put aside—in
reserve—for the replacement of major components of a
community's common property
◉ reserve cash flow statement Answer: shows the amount to be
funded and the amount to be expended from the replacement fund
over a given period of time
◉ reserve study Answer: budget planning tool that considers the
current status of the replacement fund and determines a stable and
equitable funding plan to offset the anticipated future major
common area expenditures
, ◉ revenue Answer: consists of the collective items or amounts of
income which, in the case of a community association, are
appropriated for public expenses
◉ threshold funding Answer: this method of funding is based on the
baseline-funding concept; the minimum reserve cash balance in this
concept is set at a predetermined dollar amount
◉ zero-based budgeting Answer: with this method, all line items are
set to zero and the amount of funds allotted to each must be justified
◉ acceleration Answer: the collection of all assessments due
through the end of the fiscal year (e.g., if an owner's payments on the
annual assessment are due monthly and become delinquent at the
end of March, all monthly payments through December of that year
are due immediately)
◉ assessment Answer: the owner's financial obligation to the
community association during a given period of time—usually one
year—that covers the owner's share of the common expense (also
known as "common expense liabilities" in some states)
◉ bad debt write-off Answer: consists of recording uncollectible
money as an expense that the association must absorb; this usually
requires a resolution of the board
EXAMS 2026 COMPLETE QUESTIONS AND
ANSWERS GUARANTEED TO PAS
◉ chart of accounts Answer: an organized list of titles, descriptions
and assigned numbers of all categories in an organization's general
ledger; the assigned number helps you locate the account and the
title describes the category
◉ discretionary budget line items Answer: items based on owner,
board and committee desires; they are items people would like to
have—given their values, lifestyle, and preferred level of service (e.g.
social and recreational expenses, and picnic areas)
◉ expenses Answer: the cost of goods and services used to operate
and maintain the community's property
◉ FHA (Federal Housing Administration) Answer: regulates and
influences such items as the amount of insurance a community
association must carry, procedures for financial operations and
requirements for the upkeep of property
,◉ FHLMC (Federal Home Loan Mortgage Corporation) Answer: buys
mortgages from lenders and in doing so require certain types of
insurance to be in place
◉ FNMA (Federal National Mortgage Association) Answer: federally
established secondary mortgage institution that may set
requirements that your community association will have to meet if
owners are to participate in their financing programs
◉ full funding Answer: the goal of this strategy is to attain and
maintain the reserves at or near 100% as called for on the
component inventory
◉ historical and trend budgeting Answer: this method begins with
the assumption that existing line items are needed; the amount of
funds allotted to each during the current year is adjusted for
expected changes in the coming year
◉ major improvement expenses Answer: consist of items that are
not necessarily required, but are added to improve the overall
welfare, safety or life of the residents—or to enhance the value of
the community association as reflected in the resale value of units
◉ operating budget Answer: the financial plan devoted to day-to-day
activities includes operational expenses and major improvement
expenses—but not the replacement fund
,◉ operating expenses Answer: those items that occur on a regular
basis—day to day, week to week, month to month, and year to year
◉ reconciliation of expenses and revenue Answer: after you draft
both your operating and replacement fund budgets for the coming
year, you must settle your estimated expenses with your
community's anticipated revenue; to bring together after a
difference
◉ replacement fund Answer: consists of money put aside—in
reserve—for the replacement of major components of a
community's common property
◉ reserve cash flow statement Answer: shows the amount to be
funded and the amount to be expended from the replacement fund
over a given period of time
◉ reserve study Answer: budget planning tool that considers the
current status of the replacement fund and determines a stable and
equitable funding plan to offset the anticipated future major
common area expenditures
, ◉ revenue Answer: consists of the collective items or amounts of
income which, in the case of a community association, are
appropriated for public expenses
◉ threshold funding Answer: this method of funding is based on the
baseline-funding concept; the minimum reserve cash balance in this
concept is set at a predetermined dollar amount
◉ zero-based budgeting Answer: with this method, all line items are
set to zero and the amount of funds allotted to each must be justified
◉ acceleration Answer: the collection of all assessments due
through the end of the fiscal year (e.g., if an owner's payments on the
annual assessment are due monthly and become delinquent at the
end of March, all monthly payments through December of that year
are due immediately)
◉ assessment Answer: the owner's financial obligation to the
community association during a given period of time—usually one
year—that covers the owner's share of the common expense (also
known as "common expense liabilities" in some states)
◉ bad debt write-off Answer: consists of recording uncollectible
money as an expense that the association must absorb; this usually
requires a resolution of the board
