We compare the balance of terms in moisture and temperature prediction equations during short forecasts by the Community Atmosphere Model (CAM2) with observed estimates at the Atmospheric Radiation Measurement (ARM) Southern Great Plains site for two intensive observing periods (IOPs). The goal is to provide insight into parameterization errors which ultimately should lead to model improvements. The atmospheric initial conditions are obtained from high-resolution numerical weather prediction (NWP) analyses. The land initial conditions are spun up to be consistent with those analyses. Three cases are considered: (1) June/July 1997 when the atmosphere is relatively moist and surface evaporation corresponds to 90% of the precipitation with advection accounting for the remainder; (2) rainy days in April 1997 when the atmosphere is less moist and horizontal advection accounts for much of the precipitation with a small contribution from surface evaporation and the balance being derived from the water already present in the column; and (3) nonrainy days of the April 1997 when the moist process parameterizations are inactive and the planetary boundary layer (PBL) parameterization is dominant. For the first case the Zhang-McFarlane deep convective parameterization drives the model to a wrong state. For the second the Hack shallow convective parameterization appears to be not acting deep enough. During both periods inconsistencies between CAM2 and ARM surface fluxes, land surface conditions and the net surface radiative fluxes indicate that the exchange parameterizations should be examined further. For the third case the PBL parameterization does not appear to create the correct vertical structure. In addition, the individual components of the dynamical tendency are very different between CAM2 and ARM, although the total dynamical tendency is similar in the two. Although these observations do not imply that those components are themselves wrong since they may be responding to other errors, each of these components should be examined further to determine the cause of their behaviors.