M100 Community Association Management Exam with Questions and Answers

M100 Community Association Management Exam with Questions and Answers A community association’s balance sheet shows total assets of $1,200,000 and total liabilities of $350,000. What is the association’s fund balance (equity)? a. $850,000 b. $1,550,000 c. $350,000 d. $1,200,000 Correct Answer: a. $850,000 Rationale: Fund balance is calculated as assets minus liabilities. $1,200,000 − $350,000 = $850,000. This figure represents the association’s net financial position. An association reports annual assessment revenue of $900,000. During the year, $45,000 remains uncollected. Under accrual accounting, how much assessment revenue should be reported on the income statement? a. $855,000 b. $45,000 c. $900,000 d. $945,000 Correct Answer: c. $900,000 Rationale: Under accrual accounting, revenue is recognized when earned, not when collected. The full assessment revenue of $900,000 is reported, while the unpaid amount is recorded as assessments receivable.