BUDGET FUNDAMENTALS Final Examination Questions
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7. Which statement best describes a balanced budget? a. The amount budgeted for revenue is equal to the amount budgeted for expenses. b. It permits a deficit but not a surplus. c. The cost of operations and cost of reserves are equal. d. Budgeted expenses must decrease if the assessments are not in balance with the prior fiscal year. 8. Who is responsible for providing a proposed annual budget in a condominium? a. A CAM may never prepare a budget. b. The board of directors. c. An independent certified public accountant must provide the annual budget. d. There are no corporate or statutory requirements to provide an annual budget. 9. What is the requirement of reserves in a homeowners’ association? a. The association must reserve funds for roof replacement of each single-family home in the event of a hurricane. b. Florida Statute 720.303(6) provides that the budget may include reserve accounts for capital expenditures and deferred maintenance that the association is responsible for. c. The approval to establish reserves may be obtained by vote of the board at a duly called board meeting or by the written consent of the board. d. Once reserves are established in a homeowners’ association, the funding of the reserves may never be waived or reduced. 10. The requirement for a milestone inspection and structural integrity reserve study does not apply to which of the following? a. Buildings that are more than three habitable stories in height. b. Single-, two-, three-, or four-family dwellings with three or fewer habitable stories above ground. c. Any portion or component of a building that has been submitted to the condominium form of ownership and is more than three stories in height. d. A residential condominium and cooperative association for each building on the condominium or cooperative property that is three stories or higher in height.
1. What best describes a budget?
a. A financial plan that provides a projection of income and expenses for a fiscal year. b. A statement on expenses for the past calendar year. c. A requirement of the Internal Revenue Service. d. A requirement of Florida Statue 207. 2. The income section of a budget includes income from assessments. If the association allows clubhouse rental by members, what is that income considered? c. Non-collectable income. d. Non-assessment income. 3. The SIRS must include items as related to the structural integrity and safety of the building including which of the following? a. Any other item that has a deferred maintenance expense or replacement cost that exceeds $25,000 or the inflation-adjusted amount determined by the division. b. Any other item that has a deferred maintenance expense or replacement cost that exceeds $10,000 or the inflation-adjusted amount determined by the division. c. Any other item that has a deferred maintenance expense or replacement cost that exceeds $15,000 or the inflation-adjusted amount determined by the division. d. Any other item that has a deferred maintenance a. Residual funding. b. Reserve income. expense or replacement cost that exceeds $35,000 or the inflation-adjusted amount determined by the division. 4. Which statement best describes the operating section of a budget? a. It must be divided into quarters for presentation to members. b. It has specific restrictions on the use of funds allocated for each account. c. It identifies routine regular occurring income and expenses of the association. d. It must always be prepared by an accountant. 5. The operating section should include all of the following, EXCEPT: a. Non-assessment revenue. b. Management fees (if appropriate). c. Maintenance. d. Reserves for roof replacement for a condominium. 6. Regarding a bulk service contract (such as cable TV) when developing the budget, which of the following must be considered? a. Such services may never be a common expense of a homeowners’ association. b. Such services may be assessed as a common expense on a per-unit basis only. c. Such service may be excluded from the assessment of a hearing or sight disabled member. d. Bulk service contracts may never provide for an increase during the entire contract term.
Course Code: CAMFL03BF
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Book Code: CAMFL1526
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