CMCA Test Preparation UPDATED
ACTUAL Exam Questions and CORRECT
Answers
Sources of Budget Requirements - CORRECT ANSWER Governing Docs, Federal & Local
laws, State statutes, regulations and case law.
Which agencies require an HOA budget - CORRECT ANSWER Fannie/ Freddie, FHA, VA,
etc
Sources of Revenue - CORRECT ANSWER Assessments, Interest, Late Fees, Fines, etc.
Types of Expenses - CORRECT ANSWER Operating, Major/ Capital Improvements,
Replacement of existing components.
Chart of Accounts - CORRECT ANSWER Organized list of the titles, descriptions and
assigned numbers of all accounts in an organizations general ledger.
Two types of budget preparation - CORRECT ANSWER Zero-based and Historical trend.
Percent funded reserve account - CORRECT ANSWER Allows the HOA to measure the
relative size of their replacement reserves compared to a fully funded reserve balance.
Acceleration - CORRECT ANSWER Collection of all assessments due through the end of the
fiscal year.
Extra Judicial remedies for collection of assessments - CORRECT ANSWER Late charges/
interest, requiring a sec deposit, suspending owners use privileges or voting rights.
, Lien - CORRECT ANSWER Legal claim by one party on the property of another to obtain
the payment of a debt or satisfaction of an obligation.
Foreclosure - CORRECT ANSWER Legal proceeding filed in court whereby a party with a
claim against an owner can claim ownership of the unit involved in order to recover the money it
is owed.
3 types of bankruptcy filings - CORRECT ANSWER Chapter 7 (liquidation), Chapter 11
(corporate reorganization), Chapter 13 (personal reorganization).
Accounting Methods for an HOA - CORRECT ANSWER Cash basis (received/ goes out),
accrual basis (earned/ incurred) and modified cash basis (earned/ goes out).
3 components of a financial report - CORRECT ANSWER Income, expense and net revenue
(or loss).
Balance Sheet - CORRECT ANSWER Summary of a community's financial position at a
specific point in time.
3 major components of a balance sheet - CORRECT ANSWER Assets, Liabilities and
member's equity or fun balance.
Balance Sheet Formula - CORRECT ANSWER Assets = Liabilities + Member's Equity or
Assets - Liabilities = Member's Equity.
GAAP - CORRECT ANSWER Generally Accepted Accounting Principles
Engagement Letter - CORRECT ANSWER When a CPA is hired this is sent to the
association outlining scope of work for the Audit.
ACTUAL Exam Questions and CORRECT
Answers
Sources of Budget Requirements - CORRECT ANSWER Governing Docs, Federal & Local
laws, State statutes, regulations and case law.
Which agencies require an HOA budget - CORRECT ANSWER Fannie/ Freddie, FHA, VA,
etc
Sources of Revenue - CORRECT ANSWER Assessments, Interest, Late Fees, Fines, etc.
Types of Expenses - CORRECT ANSWER Operating, Major/ Capital Improvements,
Replacement of existing components.
Chart of Accounts - CORRECT ANSWER Organized list of the titles, descriptions and
assigned numbers of all accounts in an organizations general ledger.
Two types of budget preparation - CORRECT ANSWER Zero-based and Historical trend.
Percent funded reserve account - CORRECT ANSWER Allows the HOA to measure the
relative size of their replacement reserves compared to a fully funded reserve balance.
Acceleration - CORRECT ANSWER Collection of all assessments due through the end of the
fiscal year.
Extra Judicial remedies for collection of assessments - CORRECT ANSWER Late charges/
interest, requiring a sec deposit, suspending owners use privileges or voting rights.
, Lien - CORRECT ANSWER Legal claim by one party on the property of another to obtain
the payment of a debt or satisfaction of an obligation.
Foreclosure - CORRECT ANSWER Legal proceeding filed in court whereby a party with a
claim against an owner can claim ownership of the unit involved in order to recover the money it
is owed.
3 types of bankruptcy filings - CORRECT ANSWER Chapter 7 (liquidation), Chapter 11
(corporate reorganization), Chapter 13 (personal reorganization).
Accounting Methods for an HOA - CORRECT ANSWER Cash basis (received/ goes out),
accrual basis (earned/ incurred) and modified cash basis (earned/ goes out).
3 components of a financial report - CORRECT ANSWER Income, expense and net revenue
(or loss).
Balance Sheet - CORRECT ANSWER Summary of a community's financial position at a
specific point in time.
3 major components of a balance sheet - CORRECT ANSWER Assets, Liabilities and
member's equity or fun balance.
Balance Sheet Formula - CORRECT ANSWER Assets = Liabilities + Member's Equity or
Assets - Liabilities = Member's Equity.
GAAP - CORRECT ANSWER Generally Accepted Accounting Principles
Engagement Letter - CORRECT ANSWER When a CPA is hired this is sent to the
association outlining scope of work for the Audit.
