Random CMCA Practice Test Questions (Under Construction)

Random CMCA Practice Test Questions (Under Construction) C. A work order/response form - A, B, and D speak to elements OTHER than a control to ensure maintenance work is completed. Ans- Which of the following is a c ...

Random CMCA Practice Test Questions (Under Construction) C. A work order/response form - A, B, and D speak to elements OTHER than a control to ensure maintenance work is completed. Ans- 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 warranties C. A work order/response form D. A contractor's invoice C. Maintenance responsibility chart along, with the governing documents, defines parameters of association maintenance responsibility. The other answers have no bearing on necessity of maintenance or maintenance responsibility. Ans- 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 B. Re-roofing the buildings - Large contracts involving significant material purchase and/or use of subcontractors commonly include lien waivers and should be recommended to the board. A, C, and D typically do not include significant material purchases or the use of sub-contractors so a waiver of lien is not necessary. Ans- In what type of a contract would a waiver of lien by recommended? A. Repair of the HVAC system B. Re-roofing the buildings C. Repair of the pool pump D. Annual tree pruning B. Maintain certain limits of insurance - Co-insurance seeks to the limits of insurance in place at the time of a loss and speaks to insurance obligation for the parties involved in the claim. Co-insurance does not obligate the Association to pay a deductible. Provides no obligation to provide insurance for homeowners. Ans- 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 A. Negotiate contracts within the bidding process. Incorrect Answers: B. Employment practices liability insurance is typically purchased by an association that has employees to provide coverage against certain types of claims by those employees, and usually accompanies a workers compensation insurance policy. C. The association MUST NEVER assume that contractors carry their own insurance coverage and should require all contractors to provide evidence of insurance. D. D&O insurance policies is designed to pay for wrongful acts that do not lead to property damage (PD), bodily injury (BI), personal injury (PI), or advertising injury (AI); an example of a claim for coverage under D&O would be if a board of directors is accused of not uniformly enforcing rules or covenants. Therefore, it is unlikely that the services of independent contractors would lead to claims under D&O. Ans- When an association contracts out all of its services 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. A. Did not notify association of their current address. It is the owner's responsibility to provide current contact information to Management. Incorrect: B. The duty to notify all owners of meetings belongs to the Board, which is often delegated to Management. C. Signing a petition to hold a meeting is not legal notice of the meeting. The duty to notify all owners of meetings belongs to the Board, which is often delegated to Management. D. The notice of meetings is sent to the "Owner of Record" at the last known address. In the case of multiple owners sharing title to a unit, the owners of that unity have the duty to notify the Board/Management which one of the owners will receive notices, and provide current contact information. Ans- 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. Shares title with multiple owners. A. Governing documents Incorrect: B. The maintenance plan is plan for doing repairs. C. Will show financial position but not what maintenance work is required. D. Reserves are funded separately for long term repairs. Ans- 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 B. More accurately reflects the association's financial condition. Under the modified accrual basis, also sometimes referred to as modified cash basis, some accounts, such as assessment income, are maintained on the accrual basis and other accounts, such as interest or other miscellaneous income accounts, and some expenses, such as miscellaneous repairs, are maintained on a cash basis. The accrual of major expenses in particular, such as a contract for landscaping, trash removal, etc., regardless of non-receipt invoices, gives the read a much more accurate depiction of the association's financial standing, as the accruals serve to alert the reader to recognition of obligations that the association must meet. Incorrect: A. Audit work is and should be conducted by an independent CPA on a scheduled basis, typically annually. The accuracy of such work will be wholly determined by the person(s) performing such work. C. It is not necessarily accurate to say that board members will understand one type of accounting system over another as the make-up of boards is different in various associations. In particular a board member with an accounting background will have no trouble understanding reports produced on all bases of accounting. D. If anything it may take more time to produce a report on the modified accrual basis as the person preparing the report is likely to have to take more time to analyze various items of income and expense to determine the best way to report those transactions. Ans- 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 association's financial condition. C. Is more easily understood by board members. D. Can be accomplishment more quickly. FALSE Ans- TRUE OR FALSE: The basic authority in a community association lies with the developer. b. fiduciary duty Ans- The board of directors in a community association has a _____________ to act in the best interests and for the benefit of the community as a whole. a. bond b. fiduciary duty c. ballot d. quorum D. Applicable statues and governing documents. Rules cannot conflict with statues and governing documents. Incorrect: A. Penalty is not part of development it is part of enforcement. B. Resolution is method of formalizing rule not developing. C. Rules usually are expanded on or clarify governing documents. Ans- 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 statues and governing documents C. The offer to meet to hear the owner's viewpoint. Best way to get compliance is to let owner be heard and explain rule to the owner. Knowledge Tested: Successful rule enforcement Procedures. Incorrect: A. You cannot assess a fine without due process; the goal is compliance. B. This is a burdensome process and outside the scope. An amendment would need to be initiated by the board. D. The is only relevant in enforcement (must treat everyone the same). Ans- In an initial letter you send to an owner who has violated one of the association's 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. b. State laws - The hierarchy of documents is as follows: Federal Laws State Laws Declaration Bylaws Ans- If the governing documents and laws present conflicting notice periods, follow: a. The bylaws b. State laws c. Your attorney's advice d. Declarations d. Be the time keeper - It is the manager's responsibility to ensure meetings are efficient and that the Board conducts its business in a timely fashion, particularly if a timed agenda is being used. Ans- 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 d. Preventive maintenance - Preventive maintenance contracts are used for such items as pool and A/C equipment, boilers and water heaters where regular service is likely to reduce the chance of expensive emergency repairs. INCORRECT: A. Time and material contracts are typically used when the amount of time and/or material cannot be determined in advance. B. Specific repair contracts are for such things as painting, re-roofing and other specific repairs such as paving and concrete and major building repairs. C. Service contracts are used for ongoing services such as landscaping, website maintenance, trash removal, etc. Ans- In older condominiums, an association should have what type of contract covering mechanical equipment? a. Time and materials b. Specific repair c. Service d. Preventive maintenance b. Repairing and/or replacing all roofs - An outside consultant is most likely to be used in a large, complicated project, such as replacement of all roofs in a HOA. Ans- 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 all roofs c. Painting the interior of lobbies and hallways d. Repairing HVAC and boilers c. Specific state statues - There may be specific state statues addressing regulations which effect the management of a community association. Ans- Which of the following has the greatest regulatory influence on the management of a community association? a. Federal statues b. Articles of Incorporation c. Specific state statues d. General state statues FALSE Ans- TRUE OR FALSE: Employees are finished with training after they receive their initial training for a job. a. Frequent neighborhood inspections - The key for the correct answer is "control" and the only response that speaks to an overall system of control is frequent neighborhood inspections. Incorrect: B, C, D - A methodology that can contribute to control, but A is the only answer that speaks to an action that create a control. Ans- 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 bRandom CMCA Practice Test Questions (Under Construction) C. A work order/response form - A, B, and D speak to elements OTHER than a control to ensure maintenance work is completed. Ans- 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 warranties C. A work order/response form D. A contractor's invoice C. Maintenance responsibility chart along, with the governing documents, defines parameters of association maintenance responsibility. The other answers have no bearing on necessity of maintenance or maintenance responsibility. Ans- 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 B. Re-roofing the buildings - Large contracts involving significant material purchase and/or use of subcontractors commonly include lien waivers and should be recommended to the board. A, C, and D typically do not include significant material purchases or the use of sub-contractors so a waiver of lien is not necessary. Ans- In what type of a contract would a waiver of lien by recommended? A. Repair of the HVAC system B. Re-roofing the buildings C. Repair of the pool pump D. Annual tree pruning B. Maintain certain limits of insurance - Co-insurance seeks to the limits of insurance in place at the time of a loss and speaks to insurance obligation for the parties involved in the claim. Co-insurance does not obligate the Association to pay a deductible. Provides no obligation to provide insurance for homeowners. Ans- 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 A. Negotiate contracts within the bidding process. Incorrect Answers: B. Employment practices liability insurance is typically purchased by an association that has employees to provide coverage against certain types of claims by those employees, and usually accompanies a workers compensation insurance policy. C. The association MUST NEVER assume that contractors carry their own insurance coverage and should require all contractors to provide evidence of insurance. D. D&O insurance policies is designed to pay for wrongful acts that do not lead to property damage (PD), bodily injury (BI), personal injury (PI), or advertising injury (AI); an example of a claim for coverage under D&O would be if a board of directors is accused of not uniformly enforcing rules or covenants. Therefore, it is unlikely that the services of independent contractors would lead to claims under D&O. Ans- When an association contracts out all of its services 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. A. Did not notify association of their current address. It is the owner's responsibility to provide current contact information to Management. Incorrect: B. The duty to notify all owners of meetings belongs to the Board, which is often delegated to Management. C. Signing a petition to hold a meeting is not legal notice of the meeting. The duty to notify all owners of meetings belongs to the Board, which is often delegated to Management. D. The notice of meetings is sent to the "Owner of Record" at the last known address. In the case of multiple owners sharing title to a unit, the owners of that unity have the duty to notify the Board/Management which one of the owners will receive notices, and provide current contact information. Ans- 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. Shares title with multiple owners. A. Governing documents Incorrect: B. The maintenance plan is plan for doing repairs. C. Will show financial position but not what maintenance work is required. D. Reserves are funded separately for long term repairs. Ans- 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 B. More accurately reflects the association's financial condition. Under the modified accrual basis, also sometimes referred to as modified cash basis, some accounts, such as assessment income, are maintained on the accrual basis and other accounts, such as interest or other miscellaneous income accounts, and some expenses, such as miscellaneous repairs, are maintained on a cash basis. The accrual of major expenses in particular, such as a contract for landscaping, trash removal, etc., regardless of non-receipt invoices, gives the read a much more accurate depiction of the association's financial standing, as the accruals serve to alert the reader to recognition of obligations that the association must meet. Incorrect: A. Audit work is and should be conducted by an independent CPA on a scheduled basis, typically annually. The accuracy of such work will be wholly determined by the person(s) performing such work. C. It is not necessarily accurate to say that board members will understand one type of accounting system over another as the make-up of boards is different in various associations. In particular a board member with an accounting background will have no trouble understanding reports produced on all bases of accounting. D. If anything it may take more time to produce a report on the modified accrual basis as the person preparing the report is likely to have to take more time to analyze various items of income and expense to determine the best way to report those transactions. Ans- 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 association's financial condition. C. Is more easily understood by board members. D. Can be accomplishment more quickly. FALSE Ans- TRUE OR FALSE: The basic authority in a community association lies with the developer. b. fiduciary duty Ans- The board of directors in a community association has a _____________ to act in the best interests and for the benefit of the community as a whole. a. bond b. fiduciary duty c. ballot d. quorum D. Applicable statues and governing documents. Rules cannot conflict with statues and governing documents. Incorrect: A. Penalty is not part of development it is part of enforcement. B. Resolution is method of formalizing rule not developing. C. Rules usually are expanded on or clarify governing documents. Ans- 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 statues and governing documents C. The offer to meet to hear the owner's viewpoint. Best way to get compliance is to let owner be heard and explain rule to the owner. Knowledge Tested: Successful rule enforcement Procedures. Incorrect: A. You cannot assess a fine without due process; the goal is compliance. B. This is a burdensome process and outside the scope. An amendment would need to be initiated by the board. D. The is only relevant in enforcement (must treat everyone the same). Ans- In an initial letter you send to an owner who has violated one of the association's 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. b. State laws - The hierarchy of documents is as follows: Federal Laws State Laws Declaration Bylaws Ans- If the governing documents and laws present conflicting notice periods, follow: a. The bylaws b. State laws c. Your attorney's advice d. Declarations d. Be the time keeper - It is the manager's responsibility to ensure meetings are efficient and that the Board conducts its business in a timely fashion, particularly if a timed agenda is being used. Ans- 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 d. Preventive maintenance - Preventive maintenance contracts are used for such items as pool and A/C equipment, boilers and water heaters where regular service is likely to reduce the chance of expensive emergency repairs. INCORRECT: A. Time and material contracts are typically used when the amount of time and/or material cannot be determined in advance. B. Specific repair contracts are for such things as painting, re-roofing and other specific repairs such as paving and concrete and major building repairs. C. Service contracts are used for ongoing services such as landscaping, website maintenance, trash removal, etc. Ans- In older condominiums, an association should have what type of contract covering mechanical equipment? a. Time and materials b. Specific repair c. Service d. Preventive maintenance b. Repairing and/or replacing all roofs - An outside consultant is most likely to be used in a large, complicated project, such as replacement of all roofs in a HOA. Ans- 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 all roofs c. Painting the interior of lobbies and hallways d. Repairing HVAC and boilers c. Specific state statues - There may be specific state statues addressing regulations which effect the management of a community association. Ans- Which of the following has the greatest regulatory influence on the management of a community association? a. Federal statues b. Articles of Incorporation c. Specific state statues d. General state statues FALSE Ans- TRUE OR FALSE: Employees are finished with training after they receive their initial training for a job. a. Frequent neighborhood inspections - The key for the correct answer is "control" and the only response that speaks to an overall system of control is frequent neighborhood inspections. Incorrect: B, C, D - A methodology that can contribute to control, but A is the only answer that speaks to an action that create a control. Ans- 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 b