CMCA CMCA - Certified Manager of Community Associations Financial Reporting and Controls Questions and Answers 2

Question 1

A bank reconciliation is performed to:

Accepted Answer

Verify that the association's accounting records match the bank statement balance adjusted for outstanding items

Answer

Determine homeowner assessment balances

Answer

Compare the association's budget to actual spending

Answer

Calculate the reserve fund contribution for the year

Question 2

Which financial statement shows the results of an association's operations over a specific period?

Accepted Answer

Income statement or statement of revenues and expenses

Answer

Balance sheet

Answer

Cash flow statement

Answer

Reserve study

Question 3

An accounts receivable aging report helps a community manager:

Accepted Answer

Identify how long homeowner assessment balances have been outstanding

Answer

Track vendor payment due dates

Answer

Calculate the depreciation of capital assets

Answer

Determine the reserve fund's current balance

Question 4

Accrual basis accounting recognizes revenues and expenses when:

Accepted Answer

They are earned or incurred regardless of when cash changes hands

Answer

Cash is actually received or paid

Answer

The board approves them

Answer

Year-end financial statements are prepared

Question 5

An internal control requiring two authorized signatures on checks above a certain dollar amount is an example of:

Accepted Answer

Dual approval and separation of duties

Answer

Reserve fund management

Answer

A liquidated damages clause

Answer

An audit requirement

Question 6

When an association's financial audit reveals a material weakness in internal controls, this means:

Accepted Answer

There is a significant deficiency in internal controls that could allow material misstatement of financial statements to go undetected

Answer

The association has a strong financial position

Answer

The audit found a minor clerical error

Answer

The association failed to complete a reserve study