FREE CMCA Knowledge Questions and Answers

Question 1

When the financial reports show that money was received when it was due and that costs were paid when they were due, on what basis is the community organization reporting its finances?

Accepted Answer

Cash basis

Answer

Accrued basis

Answer

Modified cash basis

Answer

Modified accrual basis

Question 2

A ____________ includes examining the governing papers, current rules and regulations, the property's state, owner and resident satisfaction, and financial operations.

Accepted Answer

management audit

Answer

management plan

Answer

employment agreement

Answer

management contract

Question 3

Which two important financial documents should the board of directors look at to see how much money is available for an expense that wasn't planned for?

Accepted Answer

Balance sheet and statement of revenue and expenses

Answer

Statement of cash flows and check registers

Answer

Replacement reserve report and general ledger

Answer

Statement of cash flows and accounts receivable report

Question 4

What is a Management Letter used for?

Accepted Answer

To note problem areas in an associations financial operation and recommend modifications and improvements.

Answer

To serve as an audit engagement letter after selection of the auditor by the board.

Answer

To serve as a cover letter to an audit report distributed to association members

Answer

To outline the nature and scope of the propose audit

Question 5

At a minimum, the interim financial report should contain:

Accepted Answer

Statement of income and expenses, account balances, and a balance sheet.

Answer

Statements of reserve funding, investment results, and accounts receivable.

Answer

Statement of cash flow, balance, and bank statements.

Answer

Statement of changes in members equity, cash flow analysis, and notes to financial statements.

Question 6

Why are there special membership meetings?

Accepted Answer

To conduct specific business.

Answer

As a means to communicate to membership.

Answer

To elect members to the board.

Answer

To vote on a new budget.

Question 7

Which of the following should be in the minutes of a board meeting?

Accepted Answer

exact wording of each motion

Answer

summary of owner comments

Answer

names of all the members present

Answer

summary of board remarks

Question 8

What should the board take into account while reviewing the proposed budget for approval?

Accepted Answer

The financial position of the association

Answer

The physical condition of the association members

Answer

The economic impact on tenants

Answer

The financial effect on the owners

Question 9

Which of the following is a typical management control that guarantees maintenance work is completed on schedule?

Accepted Answer

A work order/response form

Answer

A contractor's invoice

Answer

A purchase order system

Answer

An equipment warranties

Question 10

This is the main management control tool for figuring out if the association needs to maintain a certain property element:

Accepted Answer

Maintenance responsibility chart

Answer

Community asset inventory

Answer

Physical inspections

Answer

Association bylaws