Financial Operations & Budgeting Flashcards
7 cards from real CCS practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Financial Operations & Budgeting flashcards as text
Under the accrual method, when should a condominium association recognize assessment income?
Answer: When the assessment becomes due per the governing documents
Accrual-basis associations recognize assessment income when it is legally due, creating an accounts receivable if unpaid.
A condominium association's 'working capital fund' collected at closing from new buyers is typically used for:
Answer: Supplementing the association's operating cash flow
Working capital funds collected at closing provide the association with initial liquidity so it can operate without cash shortfalls between assessment billings.
Which of the following is NOT typically a line item in a condominium operating budget?
Answer: Roof replacement costs
Roof replacement is a capital expenditure funded through the reserve fund, not the operating budget; the operating budget includes contributions to reserves, not the replacement cost itself.
An association's accounts receivable aging report is most useful for:
Answer: Identifying delinquent unit owners and the age of their debt
The accounts receivable aging report categorizes outstanding balances by how long they have been overdue, helping management track and collect delinquencies.
A condominium association has a $1,200,000 reserve fund balance. The reserve study estimates the fully funded target at $2,000,000. The percent funded ratio is:
Answer: 60%
$1,200,000 ÷ $2,000,000 = 60% funded, meaning the association holds 60% of its ideal reserve balance.
Which document authorizes the condominium board to levy assessments and establishes the assessment methodology?
Answer: The declaration and bylaws
The declaration (and supporting bylaws) grants the board authority to levy assessments and specifies how costs are allocated among unit owners.
If a unit owner fails to pay assessments, the association's FIRST enforcement step is typically to:
Answer: Send a formal delinquency notice per the collections policy
Most association collections policies require written notice of delinquency before escalating to liens or legal action, ensuring due process.