M-100: The Essentials of Community Association Management Practice Test

These questions are part of the practice quiz. Start practicing

• True or false: The declaration or master deed often includes a maintenance schedule for particular assets.
• Which statement about ownership in a condominium is true?
• What best describes alternative dispute resolution (ADR) in community association disputes?
• Modified cash basis accounting is also commonly known as?
• Which statement is accurate regarding foreclosure within the context of remedies?
• Which document provides for transition of control of the community association from the developer to the owners?
• Which of the following is NOT typically considered routine maintenance?
• Industry standards suggest a minimum balance for the fund balance as a percentage of gross assessments. What range is considered minimum?
• What does net revenue mean?
• Self-managed associations constitute what proportion of U.S. community associations?
• Which component is required for a legally defensible progressive discipline system?
• Duty of loyalty, also known as fiduciary duty, requires the fiduciary to do what?
• Which federal law regulates working conditions, safety equipment, and the reporting of accidents?
• The two components of fiduciary duty for a board are:
• A community association employee who supervises other staff members is automatically classified as salaried.
• In a balance sheet, members' equity equals?
• A deficit in members' equity indicates what about the association's financial position?
• Business ethics in the workplace:
• The CAI code of ethics addresses which areas?
• Fidelity insurance limits are typically set by:
• Commercial general liability insurance (CGL) provides coverage for which claims?
• Which statement best describes governance decisions by the board of directors?
• Emergency services maintenance focuses on responding to unpredictable maintenance problems. Which statement best reflects its emphasis?
• Which principle is fundamental in parliamentary procedure to decide issues?
• Which of the following is NOT a basic type of residential community association?
• Segregation of exposures is a risk control technique that involves:
• Which statement best defines a timed agenda?
• Which statement best describes a financial review for a community association?
• What is a risk of stretching staff too thin for tasks?
• In Chapter 7 bankruptcy, how is payment to creditors typically determined?
• The public offering statement is a governing document.
• Assessments are typically payable in which manner?
• Building ordinance insurance is best described as:
• A ____________ is a legal claim by one party (community association) on the property of another (delinquent owner) to obtain the payment of a debt or the satisfaction of an obligation.
• Which is NOT one of the four major maintenance goals of facilities management?
• Which statement best describes the declaration in a planned community?
• What is a proxy?
• Which of the following is NOT a step in establishing a maintenance system for a community association?
• Which document defines the portions owned by individuals and those owned by the association and provides the framework for funding via assessments?
• In the hierarchy of authority for operating community associations, rules and regulations take precedence over the articles of incorporation.
• In liability insurance terms, what is an umbrella policy?
• True/False: In a properly prepared board meeting, all members should have had all the information needed for discussion before the meeting.
• Directors & Officers (D&O) liability insurance is designed to pay for damages arising from wrongful acts that do not lead to property damage, bodily injury, advertising injury, or personal injury. Which option best illustrates a wrongful act covered by D&O?
• Which description best captures personal injury exposure in a community association context?
• What is the purpose of a management letter?
• True or False: Using alternative dispute resolution to encourage residents to comply with rules and guidelines is more costly and time consuming than going through the court system.
• Which document defines the development's boundaries and land descriptions and sits above bylaws in the hierarchy?
• Why include detailed bid specifications and all contract terms in a bid request?
• During budget-to-actual comparisons, which practice helps identify variances most accurately?
• When there are significant reserve expenditures or a special assessment is in progress, which accounting approach is recommended?
• Which statement best describes risk management for a community association?
• In insurance terms, preservation of life and property is considered a paramount concern in any insurance contract. Is this statement true or false?
• The Commercial General Liability portion of the CPP covers which types of claims?
• Which homeowner policy (HO) is typically used for a condominium or cooperative unit owner?
• Which statement best describes major improvement expenses?
• Which statement best describes a committee report submitted to the board?
• True or false: Surveying residents is a common method community association managers use to evaluate their maintenance systems and implementation efforts.
• What is the primary purpose of a certificate of insurance?
• Freddie Mac regulation content:
• True or false: A good resource for identifying potential contractors are referrals from supply firms doing business with the community association.
• When a community hires a certified public accountant (CPA), what does the representation letter state?
• Which statement is true regarding notice of meeting requirements?
• Actual Cash Value (ACV) represents which of the following in property insurance?
• Which of the following is NOT listed as a benefit of a work order/response form?
• Which statement about the American Agency System is true?
• In recruitment practices, should a community association prioritize skill sets that closely match the position?
• What best defines a maintenance fee in a community association?
• Which item qualifies as a major improvement expense?
• An employee handbook should be reviewed for state-specific legal implications because its content can have legal implications.
• Why should a community association consider mechanical equipment breakdown insurance?
• Which statement correctly describes a reserve account?
• What should accompany a notice of meeting according to typical practice?
• Which statement about extra-judicial remedies is true?
• Which code specifically sets forth standards for PCAMs?
• Freddie Mac is best described as:
• Which description correctly defines transition in a community association context?
• A notice of meeting must be sent in writing to board members at least ______ before a meeting.
• True or false: A contract is an agreement between two or more parties, enforceable by law, by which each party promises to do, or not to do, something.
• Which statement best describes wrongful acts in a community association context?
• What happens when a CD is reinvested with its accumulated interest?
• Which component of a resolution states the reason for adopting the rule?
• Boiler and machinery insurance is typically used to cover which of the following risks?
• Which statement about flood insurance for a community association is true?
• Which are two other essential investment objectives besides yield?
• Revenue is commonly referred to as:
• True/False: A board of directors can legally conduct the business of the association without a quorum.
• True or false: A management control used to keep track of who is responsible for the maintenance of various property elements or areas is the analysis sheet.
• Which is the most popular version of parliamentary procedure?
• Who typically performs an audit?
• Which of the following is NOT typically a standing committee?
• For a timed agenda to be effective, what must the presiding officer do?
• Requiring a single signature to withdraw funds from an investment account is a good example of a system of internal checks and balances to protect association investments.
• Which statement best describes the coverage provided by the CGL portion of a commercial package policy?
• How is a net loss shown on the statement of revenue and expense in a community association budget?
• Employment at will means what?
• A contract should include indemnification and hold harmless provisions.
• Quorum: what is the number of members required to be present for the board to legally conduct business?
• Property damage is a type of liability exposure primarily covered by which insurance component?
• A community association is within its legal rights to dismiss an employee without cause for which reason?
• Which statement about acceleration is true?
• Each of the following statements regarding community association assessments are true EXCEPT:
• Discretionary budget line items are items based on owner, board, and committee desires; they are items people would like to have—given their values, lifestyle, and preferred level of service, e.g., social and recreational expenses.
• Ballots are used for voting when secrecy is desired. What is a common use for ballots?
• In a due process proceeding, what is the primary role of the hearing panel?
• Which agency enforces anti-discrimination laws in hiring and promotion?
• What is the primary purpose of commercial umbrella insurance?
• Which of the following is not a typical source of revenue for a community association?
• In historical trend budgeting, how is the coming year's budget typically determined?
• Which option is not one of the standard audit opinions described?
• Which basis of accounting recognizes expenses when they are incurred, regardless of whether they have been paid?
• Exhibiting and encouraging preferential treatment of employees is a good way to avoid discrimination claims.
• Which item is not typically specified in a warranty description?
• Income exposure to loss refers to a potential loss that involves
• For a community association, which term describes the process of operating, maintaining, repairing, and replacing common property?
• Which of the following is NOT typically established by the master deed?
• What should a community association manager do when assisting the association to enter contracts?
• Which of the following is not one of the basic steps in a due process procedure?
• A bid request or RFP should include which of the following?
• Among audit opinions, which describes a situation where the statements are fairly presented but with some exceptions?
• Loss reduction is best described as:
• Maintenance records can be used to verify that work was done before paying invoices.
• Which accounting method records income when earned and expenses when incurred?
• Which statement defines property exposure to loss for a community association?
• Which statement about fidelity coverage is false?
• To identify what maintenance must be done, managers should record the following information for every physical asset EXCEPT:
• Certificate of deposit (CD) in a community association is best described as:
• Which statement about OSHA requirements is correct for an association with employees?
• Which expense category includes membership, courses, and publications from professional associations?
• Which statement best describes the purpose of a community association?
• Which statement about CPA compilations is correct?
• On a responsibility chart, which item is NOT typically listed as a responsible party?
• What is a common consequence of zero-base budgeting?
• A financial report should at minimum include which components?
• Which term refers to statements defining how values such as respect, honesty, fairness, and responsibility are applied?
• A management audit typically includes review of which areas?
• A community association with only one part-time employee does not need a written personnel manual.
• What is the primary revenue source for most community associations?
• In zero-base budgeting, what must be done for each line item?
• Which term describes a governance structure where multiple residential community associations are grouped under a single umbrella, often with independent sub-associations?
• Which of the following is an example of operating expenses for a community association?
• What is the purpose of a residents forum?
• True/False: An agenda is more than an announcement of the order of business; it is a meeting management tool.
• What best describes a maintenance management tool?
• Utilizing a(n) ______ means managers and boards can obtain proposals from competent reserve providers and make informed business decisions to responsibly fund their association's reserves.
• After a delinquent account is turned over to legal counsel, which parties should communicate regarding the delinquency?
• Which option is not one of the five basic maintenance programs for community associations?
• On a cash basis income statement, which item is included?
• What is a lien?
• What is the primary purpose of a maintenance management control?
• Which completes: A ___________ occurs when expenses are greater than income.
• Which of the following accounting methods records income when it is collected and expenses when they are paid?
• Requested maintenance is corrective action in response to a resident or board member request or contractor recommendation/observation, or observed during a regular site visit. Which of the following is an example of requested maintenance?
• Which of the following is not one of the basic principles of parliamentary procedure that apply to every meeting?
• Which term describes a state statute that applies only to one or more types of community associations?
• What are the three major components of a statement of revenue and expense?
• What is the first step in addressing a conflict of interest?
• What is a common drawback of volunteer-based management in a community association?
• Which statement best defines preventive maintenance?
• Which of the following is not an example of a maintenance management control?
• Baseline funding is described as the most aggressive reserve funding method. Which statement best describes it?
• Which statement best describes revenue sources for a community association?
• Which action is HRM-related?
• Which statement best describes claims-made coverage?
• What is the board liaison system in a community association?
• If estimated expenses exceed estimated revenue, what may the board be required to do to approve higher assessments?
• Who holds the basic authority in a community association?
• Which maintenance program involves replacing assets as they wear out, based on a reserve study?
• Which instrument provides financial protection if a contractor defaults?
• Are employees finished with training after initial training?
• The purpose of a community association's governing documents is to provide for the legal structure and operation of the community.
• In zero-base budgeting, what is the starting point for each line item?
• Quorum is defined as the number of members required to be present for the board to legally conduct the business of the association.
• A representation letter includes which of the following statements?
• Who typically obtains workers' compensation insurance for a community association?
• Which information about the contractor is provided to help evaluate their ability to perform the work?
• A default hearing is held when ...
• Which term describes a community where owners hold individual lots or units while the association owns the common areas?
• What is the purpose of a chart of accounts in an organization's general ledger?
• Which statement about collection policies is true?
• What does a governing law provision specify?
• Which of the following is an external resource a community association can use to encourage residents to obey association rules?
• Which statement best defines expenses in the context of a community association?
• Which of the following demonstrates the risk control technique of exposure avoidance?
• A Rule in a community association is best defined as:
• What is a special assessment?
• Which item is included in an RFP packet?
• If the hearing panel is the board of directors, the violator must appeal to:
• Which statement about a representation letter is true?
• The occupancy agreement in a cooperative defines which of the following?
• In a commercial package policy, what does claims-made coverage mean?
• Which of the following describes the coverage provided by business income insurance in a community association?
• If board demands exceed a manager’s ability to perform, what should the manager do?
• Complete the sentence: A ______________ is a guarantee by a surety to protect the community association if the contractor fails to perform or finish the work.
• Which describes the fund reporting method?
• Is it perfectly acceptable to hold a board meeting in the home of the association president?
• In the hierarchy of governing documents, which item would prevail if it conflicts with the bylaws?
• Under FICA, when is a worker considered an employee for an association?
• Which of the following is an example of personal property for insurance purposes?
• Which statement about motions is true?
• In Chapter 7, which factor determines how much a creditor receives?
• What describes an ad hoc committee?
• Regarding staff vs contractor decision, should the manager consider where tools, equipment, and supplies will be stored—and the liability involved?
• Who can perform a management audit?
• Assessments receivable insurance covers situations where:
• Which term refers to laws that apply to a broad category of issues for community associations?
• Which statement best describes the influence of a federal agency on a community association?
• A waiver of subrogation is commonly known as what?
• What does the reserve cash flow statement show?
• Which agency is not a federally established secondary mortgage institution?
• Which aspect characterizes arbitration in the ADR framework?
• How many types of state statutes apply to community associations are identified?
• Which of the following is NOT a benefit of using the resolution process to adopt rules?
• Bad debt write-off occurs when a debt is determined to be uncollectible after reasonable efforts. Which action represents this write-off?
• Which investment objective refers to the ease with which an investment can be converted into cash or a cash equivalent?
• Which of the following is true about the automatic lien?
• The actual dollar figure may be less or more than the budgeted figure due to what?
• Threshold funding is best described as:
• Employers' liability insurance provides protection for claims made by injured employees, such as third-party-over actions and dual capacity actions. Is this statement true or false?
• Is arranging a kickback for giving an association contract ethically acceptable?
• True/False: Community managers are ultimately responsible for establishing, approving, and monitoring the community's budget.
• What is the board-approved plan that outlines goals and the yearly cycle of management tasks called?
• What does the business judgment rule require of directors?
• When does a planned community come into existence?
• Which of the following is not one of the three major components of a balance sheet?
• A waiver provision describes that waiving a breach does not act as a general waiver of future breaches. What does it mean?
• Performance planning is the process of
• What is a bid request in the procurement process?
• There are five steps in establishing a maintenance system for a community association. How many steps are there?
• Which statement best describes a primary maintenance goal related to property values?
• Which tools may be useful for compiling an action item list?
• A ______________ is a promise or guarantee that parts, materials, or labor will last for a designated period of time.
• Which statement best describes the purpose of notes to the financial statements?
• The master deed is sometimes interchangeable with declaration and CC&Rs; CC&Rs stands for?
• An umbrella association is also known as which term?
• A modification provision states that a contract may not be modified unless...
• In foreclosure, what typically happens to the unit involved?
• The typical management control used to identify physical assets and their maintenance needs is a(n) ____________.
• Which statement is true about assets in typical financial reporting for a community association?
• On a cash basis statement, revenue is recorded when it is received and deposited. On an accrual basis, revenue is recorded when it is:
• Which term describes values that guide how we ought to behave, including respect, honesty, fairness, and responsibility?
• Which accounting method records revenue when earned and expenses when incurred?
• Which statement about cooperatives is incorrect?
• Which act clarified that associations have the authority to collect assessments that come due after a homeowner files for bankruptcy?
• What is self help in a community association context?
• An example of exposure avoidance in a community association is?
• Performance ____________ are those regular and special tasks management expects an employee to perform during a certain time period.
• To indemnify and hold harmless means
• Which document defines the portions of the development owned by individual owners and those owned by the community association?
• Which contract provision means that if the contractor's employees, agents, or subcontractors damage any common or individual property in the community while performing contracted work, the contractor agrees to fully restore the property to its original condition?
• Which of the following is the correct definition of yield?
• On an accrual basis, income includes revenues earned, including amounts assessed to owners but not yet received.
• Which financial statement summarizes the flow of funds into and out of the association and is broken into operating, investing, and financing activities?
• What does a balance sheet provide for a community association?
• A payment bond protects the association from which risk?
• In addition to a meeting agenda, board members should receive each of the following supporting materials prior to a meeting EXCEPT:
• Which is not one of the four primary types of insurance coverages addressing exposure to loss?
• Which insurers are eligible for state guarantee funds if insolvency occurs?
• Which document defines the stockholder's exclusive occupancy rights and the term of the lease in a cooperative?
• Which scenario is an example of personal injury under liability coverage?
• Who should be involved in adopting a personnel manual due to its legal ramifications?
• Which statement is NOT a key characteristic of most community associations?
• If the per-incident limit equals the aggregate limit, what should the association consider?
• When comparing actual revenue to budgeted revenue, which presentation is most meaningful?
• Which statement about executive-session minutes is true?
• Mediation can be binding or nonbinding depending on what?
• Which type of bankruptcy is called a reorganization because it is designed to allow for an orderly payment to creditors that enables a corporation to continue?
• Which acronym is commonly used to refer to a Planned Unit Development?
• An action item list is used to track what between board meetings?
• Which of the following is NOT one of the four standard maintenance types (routine, preventative, requested, reserve replacement)?
• What is the purpose of zero-base budgeting?
• A major improvement expense this year becomes a reserve item in the following years.
• Even if a community association has just one part-time employee, it should have a written set of policies and procedures that define the relationship between the association and the employee and explain the rights and responsibilities of both.
• Which federal act governs debt collection practices and may apply to a community association's collection efforts?
• True or false: One of the goals of maintenance for a community association is to limit injury to residents, guests, and employees.
• Which of the following is not one of the three essential investment objectives?
• Which year-end financial statement reconciles beginning and ending members' equity with results of operations for the period?
• If a community association does not have a meeting room, where should board meetings be scheduled?
• Which management control is commonly used as a handout for owners and tenants?
• The manager should sign all contracts on behalf of the community association.
• Which item is NOT a common insurance coverage for property exposures to loss?
• An effective collection policy should exhibit each of the following EXCEPT:
• The lawn maintenance costs during a dry season illustrate which budgeting concept?
• Which of the following is an HRM function for a community association?
• Who is usually responsible for ensuring the draft budget is prepared and reviewed?
• In a resolution, which component states clearly and completely what those bound by the rule will be expected to do?
• In a budget, which type of expense occurs on a routine basis for the operation of the association?
• Default in a debt contract is ...
• Eviction is the process to remove which occupant?
• True or False: All community associations must file a federal income tax return every year.
• Minutes are used to document what?
• Is it generally a good idea to schedule a performance evaluation meeting with an employee in a public place?
• Board member liability is a potential consequence of not having a reserve study.
• What should a warranty specify?
• Executive sessions are used for which purpose?
• What is a potential pitfall of cash basis accounting for a community association?
• What best describes mediation?
• What term is used on a community association balance sheet to represent the difference between assets and liabilities?
• Percent funded is best described as which measure?
• Which document should be used to establish an ad hoc committee and define its charge?
• True or False. When a community association forecloses on a unit and it is auctioned off, the association will always get the money it is owed.
• Which term describes the losses (perils) that are covered by an insurance policy?
• Advertising injury coverage in CGL includes protection for which scenario?
• A community association should consider obtaining which two types of insurance to cover employee-related liabilities?
• Fidelity insurance in a community association primarily covers:
• Which item would typically be considered personal property for insurance purposes?
• Which statement about maintenance management tools is true?
• A mixed-use development typically features?
• Which of the following is one of the four commonly recognized exposure to loss types for a community association?
• Which document identifies the premises a stockholder may occupy exclusively and defines the rent payable by the stockholder?
• Which term refers to losses covered by an insurance policy?
• Which statement is a documented benefit of using a work order/response form?
• The OTARD rule prohibits unreasonable restrictions on the installation, maintenance, or use of satellite dishes and antennas. Which restriction is prohibited by OTARD?
• What is the purpose of an inflation guard endorsement?
• The primary responsibilities of an association-employed manager include:
• Which statement about a compilation engagement is correct?
• Common declarations are part of the CPP and typically include which information?
• Which statement about the Soldiers' and Sailors' Civil Relief Act of 1940 (SSCRA) is true?
• Which document is mandated by state statute and provides information on the community to prospective buyers?
• In a 55 and older community, what percentage of occupied units must have at least one resident aged 55 or older?
• Which term is NOT a commonly used name for a planned community?
• Which committee type is typically responsible for elections, nominations, and architectural standards?
• Full funding is best described as:
• Which statement is NOT a characteristic of a community association?
• Deductible: what is it?
• What term describes the board’s duty to act in the best interests of the community?
• Which of the following correctly matches a type of resolution?
• Cease and desist letter: which statement is correct?
• Which information is typically recorded in an inventory?
• What does liquidity mean in investment objectives for a community association?
• Which item is NOT a typical consideration when deciding between staff and contractor for a task?
• Which item is described in a CPA engagement letter?
• A manager's responsibility includes storing and labeling supplies in accordance with OSHA standards.
• Which scenario is covered by extra expense insurance?
• Bonds are an investment option for community associations. Which statement is true?
• If adequate supervision cannot be provided on site, what should the manager consider?
• Which statement about the master deed reflects its role?
• What document defines the expectations of the manager's duties in fulfilling contractual terms?
• An architectural guideline in a community association typically regulates:
• In zero-base budgeting, what does the process require you to analyze?
• GAAP requires which type of accounting for community associations?
• Which of the following is NOT one of the five basic maintenance programs?
• Duty of care is the obligation in the management of a community association. What does it require?
• Excess revenue over expense is also known as which of the following?
• Which of the following is an example of an architectural guideline?
• Each of the following are reasons for maintaining a replacement fund EXCEPT:
• Which statement is NOT a reason for establishing community rules and architectural guidelines?
• A master association is also known as what?
• Which item is NOT typically included in operating expenses?
• Ethics in business is best described as which idea?
• Which of the following is a liability exposure to loss?
• When should performance evaluations be conducted?
• An occupancy agreement is commonly known as which document?
• What is the maximum amount insured per investor in a single FDIC institution?
• Which provision addresses the transition of control from the developer to the owners?
• Which of the following is an example of a discretionary line item in a community budget?
• In the general hierarchy of governing documents, which item typically contains the declaration and CC&Rs?
• A maintenance contact sheet is used to:
• The 55 and older designation prohibits children and limits occupancy to a certain age span.
• Bylaws address which topics?
• What does the Fair Labor Standards Act require for covered employees?
• Which funding approach falls between baseline funding and full funding and may require special assessments or bank loans?
• A due process procedure is a formal rules-enforcement process designed to protect the rights of all parties involved. Which benefit is listed?
• Which document primarily governs the ongoing rules and restrictions residents must follow in a community association?
• Which statement about reporting methods is true?
• Medical payments insurance covers?
• A well-run community association should have which of the following regarding investments?
• Which document is not a governing document but is commonly accompanied by it and mandated by statute?
• True or False: When a debt cannot be collected from an owner after a reasonable effort has been made, it must take a bad debt write-off.
• The agenda is primarily which of the following in meeting management?
• Fannie Mae is best described as:
• Which guideline is part of parliamentary debate to keep discussion focused?
• Cash basis of accounting is described as:
• Which of the following is a typical example of a wrongful act that may lead to claims against the association?
• The business judgment rule: what does it generally mean?
• CAI established the Reserve Specialist designation program to help community managers and board members identify qualified reserve study providers and to assist communities in developing their reserve study.
• Which statement best describes assessments?
• Public offering statement: which statement is true?
• Bid specifications include which of the following?
• A personal money judgment is best described as which of the following?
• A personnel manual is commonly referred to as which of the following?
• Which characteristic is NOT listed among the protected categories by the EEOC in typical materials?
• The format of meeting agendas is largely based on which procedure?
• The primary purpose of a community association is to provide for the governance, business, and communal aspects of the association.
• In the hierarchy, lower documents cannot change the terms of higher-level documents.
• Which statement correctly describes safety as an investment objective?
• Professional ethics refers to which of the following?
• Which document is used to determine if a bidder is technically and financially qualified and may be included in the RFP packet for very large and complicated jobs?
• Which of the following is an internal resource a community can use to encourage an owner or tenant to conform to community association rules?
• An assignability provision commonly requires:
• CC&Rs generally establish which of the following?
• What does E&S stand for in the context of non-admitted insurers?
• What is the purpose of the Reserve Specialist (RS) designation?
• Which statement best describes the role of a professional community association manager?
• Chapter 11 bankruptcy is best described as:
• Performance goals are defined as...
• Demolition is one of three components of Ordinance/Law insurance. What does this component cover?
• GAAP requires the statement of cash flows.
• Which HO policy is typically a tenant's policy?
• Which of the following is NOT a GAAP year-end financial report requirement for community associations?
• Turnover refers to the date at which homeowners gain control of their association from the developer. Which option correctly states this?
• If a property insurance policy requires a coinsurance percentage and it is not maintained, what happens?
• Which statement about RFP content is true?
• Baseline funding is described as keeping reserve cash above zero with lower contributions, increasing the risk of which outcome?
• For properties not in a flood plain, flood insurance:
• Who should sign an employment agreement to ensure validity?
• HO-6 policy is designed for which type of property?
• Under federal anti-discrimination law, which of the following is NOT protected?
• What characterizes mandatory budget line items?
• Which statement about special assessments is true?
• The Federal Housing Administration (FHA) is best described as:
• An agreed amount endorsement provides for which of the following?
• In self-managed associations, who is responsible for maintaining accounting records?
• Which of the following is NOT a responsibility of an association-employed manager?
• Who elects the board of directors to act on behalf of the community?
• The revenue and expense categories used in a budget must be the same categories used in financial records, reports, and statements.
• Which statement best describes the purpose of a budget in a community association?
• Which of the following best describes the purpose of a reserve study in a community association?
• Zero-base budgeting requires justification for expenditures even if recurring.
• What is the primary purpose of investments as defined in the material?
• The documents that bring the community association into existence and indicate whether stock will be issued are called what?
• Which element is a basic component of an employment agreement with the association's manager?
• What is a severability provision?
• Which document binds owners to covenants, restrictions, and creates a binding relationship between owners and the community association?
• Contingent liability is a component of which type of insurance?
• Which statement best describes a hearing notice?
• Which of the following is an example of segregation of exposures?
• Hired & non-owned automobile liability insurance provides coverage for what scenario?
• Which statement best describes the effect of specifying the duration of a meeting in the agenda?
• Which of the following responsibilities relate to the governance function of a community association board of directors?
• How often is a balance sheet typically prepared?
• Which statement best describes zero-base budgeting?
• A waiver of the transfer of recovery rights endorsement deletes the right to seek reimbursement from which party?
• A financial review provides:
• Delinquent payments may result in all of the following EXCEPT:
• What is yield in the context of community association investments?
• A written job description should include which elements?
• Who should execute the representation letter?
• In disputes involving enforcement of governing documents, can D&O insurance provide defense for the board?
• Which statement about CPAs is correct?
• True/False: Personnel issues are topics that often require an executive session.
• Which statement best describes a reserve study?
• Treasury bonds have which of the following characteristics?
• Which of the following is not an extra-judicial procedure for encouraging an owner to pay off a delinquent account?
• What is the main purpose of a maintenance record?
• Which best describes the purpose of an audit in a community association?
• Which management form is characterized by the association being managed by the board or committees under the board's direction?
• What is a responsibility chart used for in a community association?
• Which statement accurately describes Fannie Mae’s role in relation to HOA insurance obligations?
• With historical trend budgeting, all line items are set to zero and the amount of funds allotted to each must be justified.
• Major improvement expenses are not a source of revenue for a community association.
• GAAS establishes the format and wording of which document?
• What does a management plan provide?
• What is a waiver of lien?
• Which mechanism is established by governing documents to secure assessment payments?
• Which category is protected under familial status in the Fair Housing Act?
• Ballots may be used for which purposes?
• Reserve replacement programs are designed to fund replacement of major components as they reach end of life. Which option best expresses this purpose?
• Chapter 13 bankruptcy is used to:
• Full funding refers to:
• Complete the sentence: A __ is a written means of voting when secrecy is desired.
• Which statement best describes the fund reporting method?
• Under SSCRA, active service members' dependents are protected from eviction if rent does not exceed how much per month?
• What is a performance bond?
• Electronic data processing (EDP) insurance covers what kind of exposures?
• Aggregate amount in insurance refers to what?
• What is a core benefit of performance planning?
• Which term describes the mandatory lien-based assessments used to operate and maintain a community?
• Which items are typically shown on a certificate of insurance?
• A maintenance calendar or schedule serves to:
• Which insurance type includes contingent liability to bring construction up to current code so a building can be eligible for an occupancy permit?
• In a community association budget, which type of expense covers items not required for daily operations but added to enhance value (for example, a gazebo or awnings)?
• Which accounting method records income and expenses on a cash basis with selected items recorded on an accrual basis?
• Which statement about bylaws is true?
• What does employers' liability insurance primarily cover for a community association?
• Which is a component of ordinance/law insurance?
• Reconciliation of expenses and revenue involves which concept?
• Which of the following is NOT a typical use of a work order/response form?
• Robert’s Rules is best described as:
• Under GAAP, which accounting basis is required?
• Which document establishes the corporation's structure and indicates whether stock will be issued?
• What does the statement of changes in members' equity show?
• Which of the following statements about reserve funds is true?
• Adoption of the annual budget is an example of which type of resolution?
• Bodily injury (BI) is a term used in insurance to describe what?
• In a cooperative, which statement is true?
• What is the desired outcome of an audit opinion?
• Which reporting method uses separate columns for operating, reserve, and any special funds?
• Which of the following is not one of the sections of a resolution?
• With a compilation, the CPA prepares the financial statements based on information provided. Which statement is true?
• For 55 and older housing, which agency's approval must be obtained before construction begins?
• Which statement best distinguishes arbitration from broader ADR?
• Which of the following is NOT a typical use of a site visit report?
• In a cooperative, the proprietary lease or occupancy agreement defines the member's rights and obligations in relation to the living unit.
• Which term most closely fits the definition: 'to change a motion by inserting, adding, striking out, or substituting words'?
• True or False: To increase the likelihood that a court will uphold an association's enforcement of architectural guidelines, the board should turn a blind eye towards violations.
• Which HO policy is specifically a tenant's policy?
• Which statement is true about ownership in a condominium?
• The bidding process should be used primarily for larger jobs.
• Bond prices fluctuate in response to which market factor?
• An increase in assessment delinquencies not due to a poor economy may indicate what?
• What is the purpose of a site visit checklist?
• Which of the following best describes the relationship between assets, liabilities, and members' equity on a balance sheet?
• Which statement best defines a contract?
• Community association employees are obligated to do each of the following EXCEPT:
• In liability insurance, what does "occurrence" coverage mean?
• What is an employee handbook?
• Which of the following is NOT a major goal of maintenance in a community association?
• Which type of exposure to loss is characterized by net losses that may involve a reduction in income or an increase in operating expenses or both?
• Which statement best describes termination provisions in an employment agreement?
• Which statement is accurate regarding regulation of the insurance industry at the state level?
• Which statement is accurate about zero-base budgeting?
• Which is typically a responsibility of a mandatory committee?
• Which statement defines an appeal in a community association context?
• In Chapter 11, discharge occurs when?
• What is a key difference between the commercial reporting method and the fund reporting method?
• Which statement describes when a hearing panel should issue a decision?
• What is the typical role of standing committees in a community association?
• A deficit in members' equity is a signal for board action. Which statement best describes this signal?
• What is the purpose of ordinance law insurance when attached to a Commercial Package Policy?
• Which insurance is commonly associated with 'claims-made' coverage and governance liability?
• The two main components of a community budget are revenue and expenses.
• Progress payments on a contract are typically described as what?
• Net income or loss can differ significantly depending on whether a cash, accrual, or modified cash basis is used.
• What follows a management audit in practice?
• According to industry standards, what fund balance percentage is considered very good?
• Contractual transfers describe what?
• What is the primary purpose of an inventory in a community association?
• Which statement describes Treasury bills?
• For insurance purposes, real property includes which of the following?
• Which element is included in a management contract?
• What does an entire obligation provision state?
• Which items are part of the liabilities section on a balance sheet?
• Cleaning problem sewer lines every month to avoid backups is an example of which type of maintenance?
• Which source typically does not specify management authority and responsibilities for a community association?
• What is the purpose of coinsurance in property policies?
• An umbrella association is governance structure where there is more than one residential community association grouped together. This structure is also known as what?
• Which type of property includes information such as websites and data processing used by associations?
• Statutes are laws written and adopted by which bodies?
• Which item is excluded when calculating insurable replacement cost?
• Which of the following is a good internal control for safeguarding investment withdrawals?
• Loss prevention is best described as:
• Which approach helps prevent theft and accidents when storing tools, equipment, and supplies on a task site?
• Treasury notes are investment options that:
• What is the primary purpose of a community association's governing documents?
• What does abstention mean in the context of board voting?
• In typical financial reporting for a community association, which item is usually not recorded as an asset?
• In zero-base budgeting, why might actual spend differ from budget?
• A reserve study must include at minimum which items?
• The articles of incorporation in a community association serve to:
• Which of the following is NOT a risk control technique used by community associations?
• Notes to financial statements are required by GAAP as part of the year-end financial reports for a community association. What is their purpose?
• When filing an insurance claim for a loss, which document may be required by the insurer?
• Acceleration is the collection of all assessments due through the end of the fiscal year. Which option best describes this term?
• What is the purpose of a management report?
• Under FMLA, employers with 50 or more employees must provide up to how many weeks of unpaid, job-protected leave?