CMCA PRACTICE EXAM Q&A WITH COMPLETE SOLUTION 2022/2023

CMCA PRACTICE EXAM Q&A WITH COMPLETE SOLUTION 2022/2023   CMCA PRACTICE EXAM Q&A WITH COMPLETE SOLUTION 2022/2023 Preparing a bid request includes which of the following: A. Verifying References. B. Identifying potential contractors. C. Recommending a contractor to the board. D. Verifying contractor insurance. Legal review prior to executing a contract will assist the association in the event that: A. A subcontractor is used. B. A performance bond is required. C. There is a budgetary shortfall. D. The board has questions or concerns. Rather than describing the scope of work in detail in the contract, a manager may: A. Attach the bid specifications. B. Call each contractor to describe the job. C. Be on-site to oversee project content. D. Suggest the board meet the contractor to talk about the scope of work. In older condominiums, an association should have what type of contract covering mechanical equipment? A. Time and materials B. Specific repair C. Preventative maintenance For which project would a board most likely want to use a consultant to help develop bid specifications? A. Landscape renovation project B. Repairing and/or replacing roofs C. Painting the interior of lobbies and hallways D. Repairing HVAC and boilers In what type of contract would a waiver of lien be recommended? A. Repair of the HVAC system B. Re-roofing the buildings C. Repair of the pool pump D. Annual tree pruning In terms of compensation, a contract should state: A. Who provides insurance coverage B. Each employees rate to perform work C. When and on what terms payment(s) will be made D. Requirement for a payment bond Alternative dispute resolution includes which of the following methods? A. Mediation B. Subrogation C. Litigation D. Indemnification – Employment contracts need not included: A. Legal Sources B. Interests C. Termination D. Notice What is the best way to communicate managements expectation for an employee to complete regular and special tasks during a certain time-period? A. Job orientation B. Job duties C. Establishing performance goals D. Performance reviews When staff members help to develop policies and procedures, they are more: A. Likely to get acknowledged for their contributions. B. Committed to their job C. Committed to implement them D. Likely to be satisfied with their job Discipline as a part of the HR management can include: A. Counseling the employee B. Selecting using a progressive system C. Terminating an under-performing employee D. Gathering performance information from other employees Which tool is most effective for defining the employee’s duties? A. Personnel Policy B. Job Description C. Routine performance reviews D. State or local labor regulations The purpose of a personnel manual or employee handbook is to: A. Provide the format for job evaluations B. Define individual job descriptions C. Detail the programs the company offers D. Explain he employee rights and responsibilities What "duty" do the Board members and the manager have to the members? A. Accountability B. Loyalty C. Service D. Conduct Which of the following would impact the operation of a newly installed entry control system? A. Communicating the access control policy to residents B. Identifying warranty procedures C. Developing a capital replacement budget line item D. Informing the associations insurance agent Who has the ultimate responsibility for the care and maintenance of the common areas, facilities and physical property? A. The board of directors B. The association manager C. The developer until turnover D. The executive committee In an initial letter you end to an owner who has violated one of the associations adopted rules, which of the following is included? A. The amount of fine assessed B. Steps to amend the rules C. The offer to meet to hear the owner’s viewpoint D. What the outcome of similar cases has been When developing a rule, it must be consistent with: A. Fine schedules as approved by the courts B. Board recommendations and resolutions C. Guidelines established within the governing documents D. Applicable statutes and governing documents The primary purpose of a community association is to: A. Guarantee property tax benefits B. Protect the financial health of the owners C. Provide owners protection from municipal laws D. Deal with governance and business The Board of directors receives its authority to perform its specific duties through the: A. Community charter B. Governing Documents C. Board resolutions D. Board member job descriptions In preparing the association’s annual financial report, many governing documents specify: A. Retaining an independent tax specialist. B. Retaining an independent certified public accountant. C. The establishment of a finance committee D. The use of the management company's accountant Which of the following is within the authority of the Board of Directors? A. Creating By-laws B. Being paid for their service C. Establishing programs D. Amending the declaration In the hierarchy of a community associations governing documents, which of the following is the highest authority? A. Bylaws B. Articles of Incorporation C. Declaration D. Mortgage lender requirements When a dispute is mediated, an uninvolved third party facilitates discussion and: A. Makes the final judgement fr both parties B. Presents a decision which the parties are free to reject C. Assist both parties in reaching a mutually acceptable agreement D. Decision is binding upon both parties - You have a proprietary lease in XYZ development. Which of the following best describes your interest in the property? A. A time-share interest B. A divided interest C. An undivided interest D. Stock membership Management conducts its tasks for the day to day operation of the association in accordance with the: A. Minutes B. Contract C. Board Presidents instructions D. Resolutions A board exercises its fiduciary responsibility by: A. Authorizing the manager to enforce rules B. Establishing internal controls C. Authorizing of a committee to adopt due process procedures D. Voting to eliminate parking rules - Which of the following has the greatest regulatory influence on the management of a community association? A. Federal statutes B. Articles of incorporation C. Specific State Statutes D. General State Statutes Which of the following types of insurance coverage is one of limited value to a community association? A. Liability B. Assessment fee receivable C. Workers compensation D. Commercial umbrella A component of building ordinance insurance coverage includes: A. Glass damage B. Extra Demolition C. Water damage D. Power failure When an association contracts out all of its service and has no employees, it is a best business practice to: A. Negotiate contracts within the bidding process B. purchase employment practices liability insurance C. Assume the contractors carry their own insurance coverage D. Increase the coverage under the D&O insurance policy Directors and Officers liability insurance is designed to cover claims resulting from: A. Theft of funds by an association board member B. Wrongful acts of employees of the association C. Bodily injury of directors and officers D. Damage to board owner property What section of an insurance policy describes the coverage limits, deductible, policy period, and premium? A. Policy conditions B. Policy Endorsements C. Policy definitions D. Declaration page(s) What does "Co-Insurance" obligate the association to do? A. Pay the deductible B. Maintain certain limits of insurance C. Cover the depreciated value of all association buildings D. Provide insurance for homeowners To provide for payment of the insurance deductible, you would: A. Pass the cost directly on to owners B. Negotiate with the hired contractor C. Allow for costs in the operating budget D. Budget as a reserve expense Liability claims should be sent to the insurer: A. Requesting a public adjuster be assigned B. Without admitting negligence C. By the insurance trustee D. Within 72 hours of the incident Where would a manager find guidelines regarding the associations responsibility for maintaining the physical assets? A. Equipment warranties B. Real estate sales contract C. Governing documents D. Board resolutions Which type of maintenance should be manage with a routine maintenance contract? A. Replacing dead shrubs B. Painting building hallways C. Cutting the grass D. Cleaning sewer lines To determine which physical assets must be maintained by the association, the manager should: A. Consult the local building codes B. Review the association governing documents C. Ask the developer to identify assets D. Walk the property to inventory assets Which of the following is an example of an association control system? A. Frequent neighborhood inspections B. Owner garage door locks C. Telephone entry system D. Posting police department information on building bulletin boards A work order: A. Documents current maintenance standards B. Identifies what needs to be done during the year C. Assigns maintenance tasks D. Is a punch-list of maintenance needs Which of the following is a common management control for ensuring maintenance work is performed in a timely manner? A. A purchase order system B. An equipment warranty C. A work order/response form D. A contractor’s invoice When monitoring maintenance of an associations swimming pool, which of the following should be entered into a permanent log at regular intervals? A. Chlorine level readings B. Facility usage statistics C. Pump motor inspections D. number of accidents or incidents - The primary management control tool for identifying whether the association needs to maintain a particular property element is: A. Physical inspections B. Association Bylaws C. Maintenance responsibility chart D. Community asset inventory On what basis is the community association reporting its finances when the financial reports indicate income when received and expenses when paid? A. Cash basis B. Modified accrual basis C. Accrued basis D. Modified cash basis Community association managers must be familiar with Federal income tax requirements and options because: A. The RS will intermittently interview the manager concerning tax filing status. B. States require managers to be knowledgeable in this area of community association finance. C. Under federal tax code, all organizations are taxable on their income unless specifically exempted. D. The accountant will require input from the community association when the tax return is prepared. The manager is not usually responsible for preparing the: A. Investment report B. Tax returns C. Annual Budget D. Variance report What are the two essential financial documents the board of directors should use to determine the amount of funds available for an unbudgeted expense? A. Statement of cash flows and accounts receivable report B. Balance sheet and statement of revenue and expenses C. Statement of cash flows and check registers D. Replacement reserve report and general ledger A significant decline in the amount of investments is most likely the result of: A. Failure to invest association funds properly B. Seasonal timing of expenses C. Expenditures out of reserve funds D. Failure to collect delinquent assessments The best reasoning for recommending the modified accrual accounting method is that, compared to cash accounting, it: A. Will make future audit work more accurate B. More accurately reflects the associations financial condition C. Is more easily understood by board members D. Can be accomplished more quickly What is the purpose of a Management Letter? A. To note problem areas in an associations financial operation and recommend modifications and improvements. B. To serve as an audit engagement letter after selection of the auditor by the board. C. To outline the nature and scope of the propose audit D. To serve as a cover letter to an audit report distributed to association members If you want to know the difference between actual and budget figures for a revenue account, to which documents should you refer? A. Balance Sheet and Budget B. Statement of Cash Flow and Budget C. Statement of Profit and Loss D. Statement of income and Expenses and Budget Your association just completed the eight months of its fiscal year. Which financial report would be most useful to project year end expenses? A. Statement of revenue and expenses B. Balance sheet C. Statement of cash flows D. Accounts payable repo The interim financial report should, at a minimum, include a: A. Statement of changes in members equity, cash flow analysis, and notes to financial statements. B. Statements of reserve funding, investment results, and accounts receivable. C. Statement of income and expenses, account balances, and a balance sheet. D. Statement of cash flow, balance, and bank statements. Executive sessions should typically be used for discussing which of the following issues: A. Controversial issue B. Members Delinquency C. Landscapers service quality D. Propose rule change If the governing documents and laws present conflicting notice periods, follow: A. The bylaws B. State laws C. Your attorney’s advice D. Declarations Why are special membership meetings held? A. To vote on a new budget. B. To conduct specific business. C. As a means to communicate to membership. D. To elect members to the board. Which of the following is a duty of a manager attending a board meeting? A. Call the meeting to order B. Establish the agenda C. Take the minutes of the meeting D. Be the time keeper If a proxy vote needs to be approved, the best option for an approver would be: A. The proxy giver B. The secretary C. A notary D. A witness If an owner fails to receive notice of a meeting, the association is not responsible if the owner: A. Did not notify association of their current address B. Does not usually attend the meetings C. Already signed the petition to call the meeting D. Shared title with multiple owners Board meeting minutes should include which of the following: A. names of all the members present B. summary of board remarks C. exact wording of each motion D. summary of owner comments What is the primary source of requirements when developing the association’s annual maintenance budget? A. Governing Documents B. State Law C. Annual Audit D. Reserve study When the board reviews the proposed budget for approval, what should it consider? A. The financial effect on the owners B. The economic impact on tenants C. The financial position of the association D. The physical condition of the association members Which method is the best alternative to increasing assessments? A. Reducing maintenance expenses by deferring repairs. B. Increasing income by charging higher user fees. C. Reducing maintenance expenses by selling common areas. D. Increasing income by opening a line of credit