FREE CMCA Beginner's Questions and Answers Flashcards

Fidelity insurance (a crime policy or fidelity bond) mainly protects the association against:

Answer: Theft or embezzlement of funds by people who handle money

Fidelity coverage reimburses the association for losses from dishonest acts by people who handle its funds.

In accrual-basis accounting, income is recorded when it is:

Answer: Earned or assessed, whatever the date the payment arrives

Accrual accounting records revenue when earned and expenses when incurred, not when cash moves.

A manager gets an urgent repair bid from a company owned by the manager's relative. What should the manager do?

Answer: Disclose the relationship to the board and let the board decide

Professional ethics require managers to disclose any conflict of interest to the board.

What is the main purpose of a resale (estoppel) certificate?

Answer: To state the seller's account balance and assessment status for the buyer

The certificate tells buyers and lenders what assessments are owed and gives other required disclosures.

Which is the best first step when a homeowner submits a written complaint about a neighbor's violation?

Answer: Confirm the violation through inspection or documentation

Fair enforcement starts with confirming the facts before any notice or fine.

Executive (closed) sessions of the board are generally appropriate for discussing:

Answer: Litigation, personnel matters, and individual delinquencies

Closed sessions are usually limited to confidential topics such as legal, personnel, and owner-specific financial matters.

Which document sets out the duties, compensation, and term of a management company's engagement?

Answer: The management agreement

The management agreement is the contract that defines the relationship between the association and the manager.