CMCA Study Guide Exam (New 2026/ 2027
Update) Questions & Answers {Grade A}
100% Correct (Verified Solutions)
Accrual basis of accounting - Correct answer This method records income when it is
earned (or assessed to owners) and expenses when they are incurred or acquired
Assets - Correct answer anything owned that has value. Unlike
commercial businesses, however, generally not the actual land and buildings of the
community association
Audit - Correct answer An examination of the accounting records and procedures of
an organization
by a CPA for the purpose of verifying the accuracy and completeness of financial
records
Balance sheet - Correct answer a summary of a community's financial position at a
specific point in time
,Cash basis of accounting - Correct answer This method records income when it is
collected and
expenses when they are paid
Certificate of deposit - Correct answer When a CD is reinvested together with its
accumulated interest, the ultimate yield will be higher than the stated rate of interest
Commercial reporting method - Correct answer Combines operating and reserve
activities in the
same column, as opposed to fund reporting, which consists of preparing separate
columns for operating, reserve and any special funds
Compilation - Correct answer A presentation of financial statements by a CPA without
the assurance that the information conforms to GAAP
CPA or Certified Public Accountant - Correct answer is an accountant who has passed
certain examinations and met statutory and licensing requirements of a US state
,Engagement letter - Correct answer a letter that describes the nature of the work to
be
done, type of report to be prepared, fee for services and time frame for the assignment
FDIC or Federal Deposit insurance corporation - Correct answer a government agency
that guarantees investors' deposits in member institutions
Fund reporting method - Correct answer Consists of preparing separate columns for
operating,
reserve, and any special funds
GAAP or General Accepted Accounting Principles - Correct answer Their purpose is to
provide uniformity among reports from different organizations
Investments - Correct answer involve the purchase of anything with money value for
the purpose of generating additional money over time (e.g. savings accounts,
certificates
of deposit, U.S. Treasury securities and stocks)
, Investment yield - Correct answer the return received on the investment
Liabilities - Correct answer consist of what is owed to others or collected in advance
(e.g. owner assessments received prior to the billed month)
Members' equity - Correct answer the fund balance under the fund method
of reporting. It equals the difference between the community association's assets and
liabilities
Modified cash basis of accounting - Correct answer This method records income and
expenses on a
cash basis with selected items recorded on an accrual basis. Modified cash varies in
format depending on the number of items accrued
Net income - Correct answer the amount left after deducting expenses from income.
Net loss - Correct answer occurs when expenses are greater than income
Update) Questions & Answers {Grade A}
100% Correct (Verified Solutions)
Accrual basis of accounting - Correct answer This method records income when it is
earned (or assessed to owners) and expenses when they are incurred or acquired
Assets - Correct answer anything owned that has value. Unlike
commercial businesses, however, generally not the actual land and buildings of the
community association
Audit - Correct answer An examination of the accounting records and procedures of
an organization
by a CPA for the purpose of verifying the accuracy and completeness of financial
records
Balance sheet - Correct answer a summary of a community's financial position at a
specific point in time
,Cash basis of accounting - Correct answer This method records income when it is
collected and
expenses when they are paid
Certificate of deposit - Correct answer When a CD is reinvested together with its
accumulated interest, the ultimate yield will be higher than the stated rate of interest
Commercial reporting method - Correct answer Combines operating and reserve
activities in the
same column, as opposed to fund reporting, which consists of preparing separate
columns for operating, reserve and any special funds
Compilation - Correct answer A presentation of financial statements by a CPA without
the assurance that the information conforms to GAAP
CPA or Certified Public Accountant - Correct answer is an accountant who has passed
certain examinations and met statutory and licensing requirements of a US state
,Engagement letter - Correct answer a letter that describes the nature of the work to
be
done, type of report to be prepared, fee for services and time frame for the assignment
FDIC or Federal Deposit insurance corporation - Correct answer a government agency
that guarantees investors' deposits in member institutions
Fund reporting method - Correct answer Consists of preparing separate columns for
operating,
reserve, and any special funds
GAAP or General Accepted Accounting Principles - Correct answer Their purpose is to
provide uniformity among reports from different organizations
Investments - Correct answer involve the purchase of anything with money value for
the purpose of generating additional money over time (e.g. savings accounts,
certificates
of deposit, U.S. Treasury securities and stocks)
, Investment yield - Correct answer the return received on the investment
Liabilities - Correct answer consist of what is owed to others or collected in advance
(e.g. owner assessments received prior to the billed month)
Members' equity - Correct answer the fund balance under the fund method
of reporting. It equals the difference between the community association's assets and
liabilities
Modified cash basis of accounting - Correct answer This method records income and
expenses on a
cash basis with selected items recorded on an accrual basis. Modified cash varies in
format depending on the number of items accrued
Net income - Correct answer the amount left after deducting expenses from income.
Net loss - Correct answer occurs when expenses are greater than income
