CCS Financial Operations & Budgeting 3

Question 1

Under the accrual method, when should a condominium association recognize assessment income?

Accepted Answer

When the assessment becomes due per the governing documents

Answer

Accrual-basis associations recognize assessment income when it is legally due, creating an accounts receivable if unpaid.

Question 2

A condominium association's 'working capital fund' collected at closing from new buyers is typically used for:

Accepted Answer

Supplementing the association's operating cash flow

Answer

Working capital funds collected at closing provide the association with initial liquidity so it can operate without cash shortfalls between assessment billings.

Question 3

Which of the following is NOT typically a line item in a condominium operating budget?

Accepted Answer

Roof replacement costs

Answer

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.

Question 4

An association's accounts receivable aging report is most useful for:

Accepted Answer

Identifying delinquent unit owners and the age of their debt

Answer

The accounts receivable aging report categorizes outstanding balances by how long they have been overdue, helping management track and collect delinquencies.

Question 5

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:

Accepted Answer

60%

Answer

$1,200,000 ÷ $2,000,000 = 60% funded, meaning the association holds 60% of its ideal reserve balance.

(CCS) Certified Condominium Specialist Practice Test

(CCS) Certified Condominium Specialist Practice Test

CCS Financial Operations & Budgeting 3