M100 MODULE 2 FINANCIAL ug ug ug
MANAGEMENTQUESTIONS WI ug ug
TH VERIFIED ANSWERS
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Which of the following accounting methods records revenue when it is collected and expenses whe
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n they are paid?
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a. cash basis
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b. accrual basis ug
c. modified cash basis ug ug
d. modified accrual basis - CORRECT ANSWER -a. cash basis
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Aug occurs when expenses are greater than revenue
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a. net income
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b. net loss
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c. net gain
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d. net profit - CORRECT ANSWER -b. net loss
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Which is not one of the 3 major components of a balance sheet?
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a. assets
b. liabilities
c. expenses
d. member's equity - CORRECT ANSWER -c. expenses
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, True/False
A CPA's representation letter describes the nature of the work to be done, the type of report to be
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prepared, the fee for services, the time frame for the assignment, and the accountant disclaimers -
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CORRECT ANSWER -False - the Engagement Letter does that
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a ug is a year- ug ug
end financial report prepared by a CPA without the assurance that the information confo
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rms to GAAP
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a. compilation
b. review
c. audit
d. opinion letter - CORRECT ANSWER -a. compilation
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Community associations must file a federal income tax return every year: T/F - CORRECT ANSWER -
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True
which of the following investment objectives for community associations refers to the ease which w
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hich an investment can be converted into cash or a cash equivalent?
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a. safety
b. liquidity
c. yield
d. treasury bills - CORRECT ANSWER -b. liquidity
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Each of the following statements regarding community association assessments are true EXCEPT:
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a. assessments penalize residents for violating association rules
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b. an assessment is the owner's financial obligation to the community association during a given pe
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riod of time
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MANAGEMENTQUESTIONS WI ug ug
TH VERIFIED ANSWERS
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Which of the following accounting methods records revenue when it is collected and expenses whe
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n they are paid?
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a. cash basis
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b. accrual basis ug
c. modified cash basis ug ug
d. modified accrual basis - CORRECT ANSWER -a. cash basis
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Aug occurs when expenses are greater than revenue
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a. net income
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b. net loss
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c. net gain
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d. net profit - CORRECT ANSWER -b. net loss
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Which is not one of the 3 major components of a balance sheet?
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a. assets
b. liabilities
c. expenses
d. member's equity - CORRECT ANSWER -c. expenses
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, True/False
A CPA's representation letter describes the nature of the work to be done, the type of report to be
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prepared, the fee for services, the time frame for the assignment, and the accountant disclaimers -
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CORRECT ANSWER -False - the Engagement Letter does that
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a ug is a year- ug ug
end financial report prepared by a CPA without the assurance that the information confo
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rms to GAAP
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a. compilation
b. review
c. audit
d. opinion letter - CORRECT ANSWER -a. compilation
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Community associations must file a federal income tax return every year: T/F - CORRECT ANSWER -
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True
which of the following investment objectives for community associations refers to the ease which w
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hich an investment can be converted into cash or a cash equivalent?
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a. safety
b. liquidity
c. yield
d. treasury bills - CORRECT ANSWER -b. liquidity
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Each of the following statements regarding community association assessments are true EXCEPT:
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a. assessments penalize residents for violating association rules
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b. an assessment is the owner's financial obligation to the community association during a given pe
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riod of time
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