The NO/NiO(100) system represents an excellent test case for the theory of surface chemical bond since accurate information about geometry, adsorption strength, and spin properties is available from experiments performed on NiO and Ni-doped MgO powders, single crystals, and thin films. We used cluster models to describe the NO/NiO interaction in combination with density functional theory (DFT) and wave function-based methods. We have identified four major aspects of the interaction: (1) the bonding cannot be described by a single determinant; (2) a spin-polarized DF-B3LYP approach gives reasonable adsorption properties at the price of a physically incorrect spin distribution; (3) a key ingredient of the interaction is the Coulomb repulsion within the Ni 3d shell; since this term is described very differently depending on the exchange-correlation functional it can result in overbound generalized gradient approach or Becke, Lee, Yang, and Parr or in strongly unbound (HFLYP) systems depending on the DFT approach; (4) the proper inclusion of the dynamical correlation is essential to treat the on-site Coulomb repulsion within the Ni 3d shell and to provide an accurate bond strength. In fact, the explicitly correlated complete-active-space second-order perturbation theory method gives results in overall agreement with the experiment. This shows the importance of treating on the same footing spin and electron correlation as well as the multiconfiguration character of the wave function.