Practice Test Geeks(CCS) Certified Condominium Specialist Practice Test
← All CCS Flashcard Decks

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

  1. A condominium association receives a $50,000 insurance settlement for storm damage to common areas. This receipt should be recorded as:

    Answer: Insurance proceeds revenue, often in the reserve or capital fund

    Insurance proceeds for capital damage are typically recorded as revenue in the reserve or capital fund, offset by related repair expenditures.

  2. Which financial ratio best indicates whether a condominium association can meet its short-term obligations?

    Answer: Current ratio (current assets ÷ current liabilities)

    The current ratio measures liquidity by comparing current assets to current liabilities, showing whether the association can cover near-term obligations.

  3. When a condominium association transitions from one management company to another, the outgoing manager should transfer:

    Answer: All financial records, bank accounts, contracts, and governing documents

    A complete transition requires transfer of all association records, accounts, and documents to ensure continuity and protect the association's legal and financial interests.

  4. A budget variance report showing actual expenses 15% above budget for landscaping most likely prompts the manager to:

    Answer: Investigate the cause and determine if a budget amendment is needed

    Significant budget variances require investigation to determine whether they represent a one-time anomaly or a systematic issue requiring a budget amendment.

  5. Under the 'straight-line' reserve funding method, the annual contribution for a component is calculated by:

    Answer: Dividing total replacement cost by total useful life

    The straight-line method spreads the total replacement cost evenly over the component's full useful life, producing a consistent annual contribution.

  6. A condominium association's investment policy for reserve funds should prioritize:

    Answer: Liquidity and safety of principal over yield

    Reserve funds must be available when needed for capital projects, so investment policies emphasize safety and liquidity over maximizing returns.

  7. Which party is typically responsible for performing a reserve study for a condominium association?

    Answer: A qualified reserve specialist or professional engineer engaged by the board

    Reserve studies are conducted by qualified reserve specialists or engineers with expertise in component analysis and life-cycle cost estimation.