CMCA: Financial Management Practice Guide.

Assessment correct answer - An ______________ is the owner's financial obligation to the community association during a given period of time -usually one year. It covers the owner's share of the common expense. Baseline funding correct answer - Budget correct answer - Chart of accounts correct answer - An organized list of the titles, descriptions, and assigned numbers of all accounts in an organization's general ledger. Discretionary budget line items correct answer - These are 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, picnic area, etc. Expenses correct answer - Consist of the cost of goods and services used to operate and maintain the association's common elements. FHA correct answer - FHLMC correct answer - Full funding correct answer - Historical trend budgeting correct 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. Sources of historical information include financial reports, existing contracts, and bills from the past year. Mandatory budget line items correct answer - These are items based on the community and owner needs. They are requirements that the community is obligated to meet, e.g. income taxes, management fees, repairs, utilities, and maintenance. Operating budget correct answer - Operating expenses correct answer - Occur on a regular basis for the normal and usual services and repairs for the association. For example, swimming pool management, professional and administrative serices, utilities, etc. Percent funded correct answer - ________________ allows an association to measure the relative size of their replacement reserves compared to a "fully funded" reserve balance. Reconciliation of expenses and revenue correct answer - Reserve account correct answer - Consists of funds put aside -in reserve- for the replacement of major components of a community's common property. Typically, the ___________________- might be used to replace asphalt paving, concrete sidewalks, roofs, contral heating, etc. Reserve cash flow statement correct answer - ___________ shows the amount to be funded and the amount to be expended from the replacement fund over a given period of time. Reserve formula correct answer - Reserve Specialist (RS) correct answer - CAI established the _______________ designation program to help community managers and board members identify qualified reserve study providers and to assist communities in developing their reserve study. Reserve study correct answer - ____________________ is a budget planning tool with which the association expects to offset ongoing deterioration and prepare for inevitable future expenses. Revenue correct answer - _________________ represents the earnings of the community association. Special assessment correct answer - A ________________ is a onetime assessment often voted on by the owners to cover a major expense that was not included in the annual budget or replacement reserve. Threshold funding correct answer - Zero-base budgeting correct answer - With this method, all line items are set to zero and the amount of funds allotted to each must be justified. Acceleration correct answer - ______________ is the collection of all assessments due through the end of the fiscal year. For example, if an owner's payments for the annual calendar year assessment are due monthly and become delinquent at the end of March, all monthly payments through December of that year are due immediately. Usually, if ________________ is not authorized in state statutes or the association's governing documents, it cannot be implemented by board resolution. Bad debt write-off correct answer - A payment that cannot be collected from an owner is called a bad debt. When a community association determines that a debt cannot be collected for an owner after a reasonable effort has been made, it should write off the debt. A ________________ consists of recording an uncollectible debt as an expense that the association must absorb. This usually requires a resolution of the board. Chapter 7 bankruptcy correct answer - ___________________ is called straight bankruptcy or liquidation. It involves the prompt conversion of all the individual's or corporation's non-exempt property to cash and the payment of creditors to the extent possible. Chapter 11 bankruptcy correct answer - ____________________ is called a reorganization because it is designed to allow for an orderly payment to creditors while enabling a corporation to continue to operate. ____________________ involves the development of a plan to pay off debts in a timely manner. Once a judge approves a plan as "fair and equitable," it is binding and discharges all debts not provided for under the plan. creditors usually eventually receive more of what they are owed under a ____________________ than a Chapter 7. However, they don't necessarily receive all they are owed.