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

Bank reconciliation reconciles the balance per the association's books with the balance per the bank statement, accounting for outstanding checks, deposits in transit, and bank errors or fees.

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

The income statement shows all revenues and expenses over a period, typically a month, quarter, or year, revealing whether the association operated at a surplus or deficit.

Question 3

An accounts receivable aging report helps a community manager:

Accepted Answer

Identify how long homeowner assessment balances have been outstanding

Answer

An accounts receivable aging report categorizes delinquent assessment balances by how long they have been outstanding such as 30, 60, or 90 or more days, enabling managers to prioritize collection efforts.

Question 4

Accrual basis accounting recognizes revenues and expenses when:

Accepted Answer

They are earned or incurred regardless of when cash changes hands

Answer

Accrual accounting records revenue when it is earned such as when assessments are due, and expenses when they are incurred such as when a service is performed, regardless of actual cash flow timing.

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

Requiring two signatures on large checks is a separation-of-duties control that prevents a single individual from authorizing large expenditures unilaterally, reducing the risk of fraud or error.

CMCA - Certified Manager of Community Associations Practice Test

CMCA - Certified Manager of Community Associations Practice Test

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