Chapter 12

Card Set Information

Author:
S
ID:
216908
Filename:
Chapter 12
Updated:
2013-05-05 18:27:51
Tags:
Financial Management Part
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Description:
To understand how an association may invest its funds To learn about developer obligation for funding associations To comprehend accrual, cash and fund accounting To become familiar with association income tax laws To understand the concept of collections and the lien process To prepare or cause to be prepared financial reports and statements
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  1. Name 9 items that must appear in a cash basis report for a
    A. Condo/Coop
    B. HOA
    • A. Professional and management fees and expenses
    • Costs for recreation facilities
    • Expenses for trash collection
    • Utility services
    • Taxes
    • Building maintenance and repair
    • Insurance 
    • Lawn care
    • Administration and salaries
    • Reserves accumulated and expended for capital expenditures
    • Deferred maintenance
    • Any other category for which the association maintains reserves
    • B. Professional and management fees and expenses
    • Cost for recreation facilities
    • Expenses for trash collection
    • Utility services 
    • Taxes
    • Building maintenance and repair
    • Insurance
    • Lawn care
    • Administration and salaries
    • Reserves if maintained my the association
    • Cost for security
  2. Please define the type report that must be provided by an association based upon the amount of the association's annual revenues:
    Cash basis accounting, mainly used by sole proprietors and businesses with no inventory. From a tax standpoint its sometimes advantageous for a new business to use. That way, recording income can be put off until the next tax year, while expenses are counted right away.
  3. How can an HOA waive the annual financial report?
  4. How long must financial records be retained?
    7 Years
  5. What are the two methods an association can use for reporting income tax and what is the difference?
    • Filing form 1120. Excess revenues form members over related expenses is subject to taxation unless the excess is returned to the members or following years assessments
    • Filing form 1120-H. enables association to elect to exclude form taxation exempt function income, generally consisting of revenue from member assessments.
  6. How can a condo or coop waive the annual financial report?

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