CCM Financial Management & Budgeting Flashcards

A community association wants to levy a special assessment to fund an emergency roof replacement. Which action is typically required FIRST?

Answer: Obtain board approval per the governing documents

Governing documents typically require board approval—and sometimes a member vote—before levying a special assessment; the board must act first.

Which financial statement shows an association's assets, liabilities, and equity at a specific point in time?

Answer: Balance sheet

The balance sheet (statement of financial position) is a snapshot of assets, liabilities, and net assets on a given date.

What does an accounts receivable aging report help a community manager monitor?

Answer: Delinquent assessment collections by how overdue they are

An AR aging report categorizes outstanding balances by how long they have been unpaid, helping managers prioritize collection efforts.

When preparing a bid comparison for a major landscaping contract, a community manager should ensure bids are evaluated on the basis of:

Answer: Equivalent scope of work across all vendors

Comparing bids is only meaningful when all vendors price identical scopes of work; otherwise cost differences reflect scope differences, not vendor efficiency.

Which internal financial control best prevents unauthorized disbursements in a community association?

Answer: Dual-signature requirement on checks above a threshold

Requiring two signatures on checks above a set dollar amount ensures no single individual can authorize large disbursements alone.

A community association invests reserve funds in a certificate of deposit. This is best described as which type of investment strategy?

Answer: Conservative capital preservation

CDs are low-risk, FDIC-insured instruments that preserve capital—appropriate for reserve funds that must be available for planned expenditures.