M100 COMMUNITY ASSOCIATION CORE EXAM
2026 SET QUESTIONS AND ANSWERS SURE A+
✔✔Name Two Main Budget Components - ✔✔Revenue & Expenses
Revenue - Owner assessments, Interest, late fees, fines, usage fees.
Expenses - Operating, major improvements, reserves
✔✔Budget Line Items - ✔✔Mandatory & Discretionary
Mandatory - Community and owner needs and obligations (maintenance, utilities,
repairs, taxes).
Discretionary - Owner, board and committee desires (social and recreational expenses,
picnic areas, patrol, pool towels).
✔✔Budgeting Methods - ✔✔Zero-Based - all line items are set to zero.
Historical trend - Item assumed to be justified and prior information adjusted for planned
changes.
✔✔Reserve - ✔✔Funds set aside for future replacement of major components of
communities common property.
, ✔✔Extra-Judicial (nonjudicial) Remedies - ✔✔Late charge/interest penalty
Security deposit requirement
Acceleration
Owner rights suspension
✔✔Judicial Remedies - ✔✔Record the association lien
Foreclose the lien
Personal money judgement
✔✔Bankruptcy - ✔✔Chapter 7 - Liquidation
Chapter 11 - Corporate
Chapter 13 - Personal reorganization
✔✔Accounting Methods - ✔✔Cash Basis - Income received and expenses paid
Accrual Basis - Income earned and expense received
Modified Cash Basis - Records income (assessments) on accrual basis and expenses
on cash basis
✔✔3 components of Statement of Revenue and Expense - ✔✔Revenue - Earning of
community
Expense - Cost of goods/services used to operate/maintain community.
Net revenue (or loss)
✔✔Balance sheet - ✔✔Snapshot of financial condition at a specific point in time. Lists
what the association owes and owns and its net worth.
✔✔3 Major Components of a Balance Sheet - ✔✔Assets - Anything owned that has
value.
Liabilities - What is owed to others or collected in advance.
Members equity - Difference between assets and liabilities.
✔✔Role of CPA - ✔✔Audit - Thorough examination of financials
Review - Spot check
Compilation - Slap docs on CPA letterhead (no check)
✔✔Investments - ✔✔Purchase of anything with money value for the purpose of
generating additional income over time.
Safety - Protect the principal amount.
Liquidity - Ease with which an investment can be converted to cash.
Yield - Amount of return on investment.
✔✔Five Types of Maintenance - ✔✔Routine
Preventative
Emergency Services
2026 SET QUESTIONS AND ANSWERS SURE A+
✔✔Name Two Main Budget Components - ✔✔Revenue & Expenses
Revenue - Owner assessments, Interest, late fees, fines, usage fees.
Expenses - Operating, major improvements, reserves
✔✔Budget Line Items - ✔✔Mandatory & Discretionary
Mandatory - Community and owner needs and obligations (maintenance, utilities,
repairs, taxes).
Discretionary - Owner, board and committee desires (social and recreational expenses,
picnic areas, patrol, pool towels).
✔✔Budgeting Methods - ✔✔Zero-Based - all line items are set to zero.
Historical trend - Item assumed to be justified and prior information adjusted for planned
changes.
✔✔Reserve - ✔✔Funds set aside for future replacement of major components of
communities common property.
, ✔✔Extra-Judicial (nonjudicial) Remedies - ✔✔Late charge/interest penalty
Security deposit requirement
Acceleration
Owner rights suspension
✔✔Judicial Remedies - ✔✔Record the association lien
Foreclose the lien
Personal money judgement
✔✔Bankruptcy - ✔✔Chapter 7 - Liquidation
Chapter 11 - Corporate
Chapter 13 - Personal reorganization
✔✔Accounting Methods - ✔✔Cash Basis - Income received and expenses paid
Accrual Basis - Income earned and expense received
Modified Cash Basis - Records income (assessments) on accrual basis and expenses
on cash basis
✔✔3 components of Statement of Revenue and Expense - ✔✔Revenue - Earning of
community
Expense - Cost of goods/services used to operate/maintain community.
Net revenue (or loss)
✔✔Balance sheet - ✔✔Snapshot of financial condition at a specific point in time. Lists
what the association owes and owns and its net worth.
✔✔3 Major Components of a Balance Sheet - ✔✔Assets - Anything owned that has
value.
Liabilities - What is owed to others or collected in advance.
Members equity - Difference between assets and liabilities.
✔✔Role of CPA - ✔✔Audit - Thorough examination of financials
Review - Spot check
Compilation - Slap docs on CPA letterhead (no check)
✔✔Investments - ✔✔Purchase of anything with money value for the purpose of
generating additional income over time.
Safety - Protect the principal amount.
Liquidity - Ease with which an investment can be converted to cash.
Yield - Amount of return on investment.
✔✔Five Types of Maintenance - ✔✔Routine
Preventative
Emergency Services
