M100 COMMUNITY ASSOCIATION MANAGEMENT EXAM | QUESTIONS AND ANSWERS GRADED A+ | 2024/2025 GUIDE
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Course
M100/M 100
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M100/M 100
M100 COMMUNITY ASSOCIATION MANAGEMENT EXAM | QUESTIONS AND ANSWERS GRADED A+ | 2024/2025 GUIDE
M100 COMMUNITY ASSOCIATION MANAGEMENT EXAM | QUESTIONS AND ANSWERS GRADED A+ | 2024/2025 GUIDE
M100 COMMUNITY ASSOCIATION MANAGEMENT EXAM | QUESTIONS AND ANSWERS GRADED A+ | 2024/2025 GUIDE
M100 COMMUNITY ASSOCIATION
MANAGEMENT EXAM | QUESTIONS
AND ANSWERS GRADED A+ |
2024/2025 GUIDE
Which of the following is not an extra-judicial procedure for encouraging
an owner to pay off a delinquent account?
a. Removing the owner's assigned parking space
b. Collecting the rent from a delinquent owner's tenant
c. Imposing a late charge on delinquent accounts
d. Foreclosing on an owner
- Correct Answer - d. Foreclosing on an owner
Initiating the foreclosure process is not an example of an extra-judicial
remedy for encouraging an owner to pay off a delinquent account.
Foreclosure is a legal proceeding filed in court whereby a party with a
claim against an owner can claim ownership of the unit involved in order
to recover the money it is owed. Extra-judicial remedy consist of
remedies outside the courts that a community association can use to
encourage a delinquent owner to pay what is owed. If a board wants to
use extra-judicial procedures, it must be provided for in a state statute,
the governing documents, or a formal resolution of the board.
,True or false. When a community association determines that a debt
cannot be collected from an owner after a reasonable effort has been
made, it must take a bad debt write-off.
- Correct Answer - True
A payment that cannot be collected from an owner is called a bad debt.
When a community association determines that a debt cannot be
collected from an owner after a reasonable effort has been made, it must
take a bad debt write-off. A bad debt write-off consists of recording an
uncollectible debt as an expense that the association must absorb. This
usually requires a resolution of the board.
Complete the following sentence: A ____________ is a legal claim by
one party (community association) on the property of another (delinquent
owner) to obtain the payment of a debt or the satisfaction of an
obligation.
a. foreclosure
b. personal money judgment
c. lien
d. bad debt write-off
- Correct Answer - c. lien
Placing a lien on an owner's property protects the community
association's interests. It encourages payment of the debt. Among other
consequences of a lien, the owner cannot sell or transfer the unit without
settling the debt. The recording of a lien against an owner's unit must be
,authorized by a community association's applicable statutes or
governing documents.
True or false. When a community association forecloses on a unit and it
is auctioned off, the association will always get the money it is owed.
- Correct Answer - False
A community association may foreclose on an owner if it thinks it can
recover what it is owed. Sometimes the act of foreclosing will prompt an
owner to pay what is owed—especially if the owner's mortgage
payments are current. If an owner has little equity in the unit—that is, still
owes most of the mortgage—the community association stands little
chance of getting the money it is owed. When a community association
or another creditor foreclose on a unit and it is auctioned off, the
association still may not get the money it is owed. The unit must sell for
a price that is high enough to pay off the delinquent assessments as well
as any other debts that take precedence over the association's claim.
Which of the following types of bankruptcy is called a reorganization
because it is designed to allow for an orderly payment to creditors that
enables a corporation to continue?
a. Chapter 7
b. Chapter 11
c. Chapter 13
d. Chapter 21
- Correct Answer - b. Chapter 11
Chapter 11 involves the development of a plan to pay off debts in a
, timely manner. Once a judge approves a plan as "fair and equitable," it is
binding and discharges all debts not provided for under the plan.
Creditors usually receive more of what they are owed under a Chapter
11 than a Chapter 7. However, they don't necessarily receive all they are
owed.
Which of the following accounting methods records income when it is
collected and expenses when they are paid?
a. cash basis
b. accrual basis
c. modified cash basis
d. modified accrual basis
- Correct Answer - a. cash basis
A community association's financial reports will reflect one of three
possible accounting methods. Cash basis records income when it is
collected and expenses when they are paid. Accrual basis records
income when it is earned (or assessed to owners) and expenses when
they are incurred or acquired. Modified cash basis records income and
expenses on a cash basis with selected items recorded on an accrual
basis.
True or false. The commercial reporting method consists of preparing
separate columns for operating, reserve, and any special funds.
- Correct Answer - False
The fund reporting method consists of preparing separate columns for
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