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

These questions are part of the practice quiz. Start practicing

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