copyright rob estell...13. while completing the punch list, the architect discovers that the wrong...

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Business and Finance

Final Exam 1

1. What is an advantage of a bad debt reserve?

A. it reduces tax liability for earned profit

B. it increases assets

C. it increases profits

D. it simplifies accounting procedures

2. Which of the following causes for adjustment to a contract price would not be considered permissible?

A. defective construction caused by a subcontractor

B. misinterpretation of the plans by the owner

C. defective plans

D. failure of the owner to make a timely selection of material

3. Who is eligible for Small Business Administration (SBA) loan programs?

A. all construction businesses located in the United States

B. corporations operated on a non-profit basis

C. businesses with fewer than 100 employees regardless of sales volume

D. construction businesses with annual sales volume of $17 million and less than 100

Employees

4. What can a contractor determine at the break-even point?

A. various yields for different types of jobs

B. the kind of work that is needed to reach a volume goal

C. growth potential

D. the least amount of sales needed to break even, assuming costs and expenses

remain reasonably constant

5. A contractor with serious cash flow problems, but with high volume of work ______________.

A. should first try to improve cash flow through budgeting

B. should first try to increase the volume of work

C. should first try to lower the volume of work

D. would likely qualify for a loan

Business and Finance Final Exam 1

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6. According to Builder's Guide to Accounting, an equity account is best described as the _____________.

A. original value of the business

B. original inventory of the business

C. original investment of the owners

D. total value of loans from the bank

7. A recorded Notice of Commencement will expire in 90 days unless ___________________.

A. Notice to Owners are filed

B. work has commenced

C. first payment to contractor is released

D. first inspection is made

8. When making a claim of lien, you must send a sworn statement of account within ________________.

A. 90 days after demand of statement has been made

B. 30 days after demand of statement has been made

C. 45 days before demand of statement has been made

D. 15 days before demand of statement has been made

9. Removable partitions which were included in the contract are deleted by a change order at a net decrease

of $10,000 in the general contractor's cost.

The contract sum should be decreased by ____________________.

A. $10,000 only

B. $10,000 less reasonable mark-up for overhead only

C. $10,000 less reasonable mark-up for overhead and profit

D. $10,000 plus administrative costs

10. What are two types of manpower estimates?

A. comparative and historical

B. graphic and detailed

C. preliminary and detailed

D. preliminary and historical

11. Which of the following is NOT insurance?

A. Surety Bonding

B. Contractors Equipment Floater

C. Transportation Policy

D. Inland Marine Insurance

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12. An employee who suffers an injury arising out of and in the course of employment must advise his/her

employer ________________.

A. immediately

B. within 48 hours

C. within 5 working days

D. within 30 days

13. While completing the punch list, the architect discovers that the wrong carpet was installed. The owner

has decided to accept the carpet, but according to AIA documents, he has the right to ______________.

A. demand that the contractor furnish him with rolls of the specified carpet

B. penalize the contractor for not following the specifications

C. reduce the contract sum by an amount which is appropriate and equitable

D. specify what deduction he will be required for accepting the wrong carpet

14. Which of the following is not a component of a Safety Program?

A. Policy Statement on Safety

B. Safety Program Costs

C. Safety Program Goals

D. Job Site Inspections

15. According to Florida Reemployment Compensation Laws, an employer who fails to file RT-6 reports

when due will be assessed a penalty of ______ for each month (or fraction thereof) that the report is

delinquent.

A. $25

B. $50

C. $75

D. $100

16. A construction company that is not tax exempt has received a materials only bid from the supplier in

the amount of $3,500. Who is responsible for the collection and reporting of the state sales tax when the

material is purchased?

A. the supplier

B. the owner of the building

C. the construction company only

D. no one; no sales tax is required


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17. A "secondary" qualifying agent is responsible for _______________.

A. the company's financial matters only on jobs where the agent's license was used to obtain the

permit

B. supervision of field work at sites where the agent's license was used to obtain the permit

C. items designated by the primary qualifying agent of the company

D. all qualifying matters as qualifying agent when the original qualifier leaves the company

18. A payment bond shall be furnished in __________________________________.

A. at least the amount of the original contract price

B. at least 75% of the original contract price

C. at least 50% of the original contract price

D. at latest 15 calendar days after the start of the work

19. According to Florida Contractors Manual, all the following should be considered overhead when

tracking job costs except __________________.

A. performance bond premium

B. professional fees

C. administrative salaries

D. office expenses

20. According to Florida Contractors Manual, which of the following are types of bid bonds?

A. forfeiture obligation and net price

B. forfeiture obligation and difference in bid

C. net price and statutory obligation

D. fidelity and performance

21. According to Builder's Guide to Accounting, regarding the inventory value, individual labeling is done

for what cost basis method?

A. first in first out

B. last in first out

C. perpetual inventory

D. specific cost

22. What is the purpose of Supplementary Record of Occupational Injuries and Illnesses (OHSA No. 301)?

A. to provide additional information about the employer listed in the log

B. to report the safety measures taken to prevent future accidents

C. to summarize the information that has been recorded in the log

D. to provide additional information on each case that has been recorded in the log


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23. What type of liability insurance protects the contractor from loss due to accidents causing bodily injury

or property damage to members of the public after construction work has been finished and put to its

intended use?

A. Builders Risk

B. Business Interruption

C. Completed Operations

D. Manufacturers' and Contractors'

24. According to AIA-A401, all the following are responsibilities of the subcontractor except

to __________________.

A. agree that the architect will have the authority to reject work

B. submit shop drawings, product data, samples, and similar submittals

C. furnish periodic progress reports to the contractor

D. make sure the owner and the contractor agree on a contract price

25. When a contractor writes off the expense of a piece of equipment over time, that process is called_____

A. accelerated depreciation

B. depreciating a fixed asset

C. depreciation of intangible property

D. depreciating a current asset

26. Under Chapter 489, when a locally licensed or registered contractor challenges the local jurisdiction's

recommended penalty for board action, the challenge must be presented to the _______________.

A. Construction Industry Licensing Board

B. Department of Business and Professional Regulation

C. Department of Community Affairs.

D. local building department

27. According to Builder's Guide to Accounting, the volume of business that must be maintained in order to

avoid a loss is the ______________.

A. percentage of sales

B. net worth

C. available cash

D. breakeven point


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28. A certified contractor is qualifying a company operating in the contractor's own name. The contractor

wants to close that company and start qualifying a new company operating as Contracting Company. The

contractor can start operating as Contracting Company ________________.

A. 15 days after sending the application to the Board

B. 30 days after sending the application to the Board

C. as soon as they have filed all the proper paperwork with the Board

D. as soon as the Board approves the new business organization

29. Which inventory cost-basis valuation method assumes that the first materials purchased are the first

used?

A. specific cost

B. first in first out

C. first in last out

D. last in first out

30. Contractors must maintain complete financial and business records, kept in the regular course of

business for the immediately preceding _______________.

A. 2 years

B. 3 years

C. 5 years

D. 7 years

31. The first step in preparing a financial statement at the end of an accounting period is to put together

________________.

A. a supplementary schedule

B. a trial balance

C. an income statement

D. the closing adjustments

32. Florida state and federal reemployment/unemployment taxes on paid wages _____________.

A. are paid wholly by the employer

B. may be partially deducted from the employee wages

C. may be deducted as a whole from employee wages

D. may be deducted from sub-contractor progress payments

33. Goodwill is an example of _______________.

A. an intangible asset

B. retained earnings

C. a current liability

D. equity


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34. All the following are advantages of leasing except ___________________.

A. an immediate tax deduction is available for the cost of monthly leases

B. the equipment will receive regular use

C. no large investment or financing commitment is required

D. it allows the contractor the chance to evaluate equipment before buying it

35. If there are insufficient funds from the contract price to pay all valid liens and all were attached at the

same time, who takes first priority?

A. contractor

B. laborers

C. suppliers

D. everyone except suppliers

36. Generally, you can take a credit against your FUTA tax for amounts you paid into state unemployment

funds. This credit may be as much as _______.

A. 3%

B. 4.4%

C. 5.4%

D. 6%

37. According to Florida Contractors Manual, which of the methods below is NOT one of the three

traditional methods of construction scheduling grouped under network analysis?

A. Critical Path Method (CPM)

B. Critical Path Analysis (CPA)

C. Cost Control Systems (CCS)

D. Project Evaluation and Review Technique (PERT)

38. According to Builder's Guide to Accounting, which one of the following assets is eligible for

depreciation?

A. land

B. warehouse

C. inventory

D. intangible property

39. What is the minimum liability insurance coverage required by state law for a certified general

contractor?

A. $25,000

B. $50,000

C. $100,000

D. $300,000


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40. According to AIA Document A201, the contract documents consist of ______________.

A. agreements between the contractor and all subcontractors specifying their relationships with the

owner

B. agreements between owner and architect, drawings, and specifications

C. agreements between owner and contractor, conditions of the contract and drawings

D. materials to be used by contractors and subcontractors

41. Real estate may only be depreciated on a _______________________.

A. straight-line basis

B. double declining balance basis

C. 150% declining balance method

D. none of the above: real estate is not depreciated

42. If after exhaustive effort a contractor fails to respond to or disagrees with the method of adjustment in

the contract sum for changes, the architect can determine the change amount. According to AIA, which

expense is not allowed as a reimbursable cost?

A. cost of material transportation

B. fringe benefits

C. hand tools (rented or owned)'

D. rental cost of machinery and equipment

43. According to Florida Reemployment Compensation, an employer who has outstanding indebtedness

billed prior to the four quarters immediately preceding the effective date of rating will be assigned a

maximum tax rate of _______________.

A. .0010

B. .0270

C. .0540

D. 5.4000

44. According to Florida Reemployment Compensation, sole proprietors are_______.

A. required to have unemployment compensation insurance

B. not considered as eligible for unemployment compensation

C. considered when determining an employer's liability

D. exempt if their gross is $10,000 or more per year

45. The Omnibus Budget Reconciliation Act of 1990 allows a maximum civil penalty of ____________ for

each willful or repeated OSHA violation.

A. $12,535

B. $50,070

C. $70,000

D. $124,709


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46. What is the last date to file Form 941 for the first quarter if all taxes were timely deposited?

A. March 31

B. April 15

C. April 39

D. May10

47. Good inventory control ____________________.

A. increases exposure to theft

B. maximizes the need for storage space

C. maximizes investment in capital inventory expenditures

D. reduces taxes and insurance costs

48. Which one of the following is a variable overhead expense?

A. utilities

B. postage

C. labor payroll taxes

D. rent

49. According to Florida Contractors Manual, short term schedules on construction projects are a detailed

explanation of the next _________________.

A. 7 days

B. 2 weeks

C. 4 weeks

D. 6 weeks

50. When the plotted job progress curve does not swing up soon enough, the contractor _______________.

A. will make a higher overall job profit

B. will finish early

C. needs to delay scheduled labor and material

D. has over-estimated the cost


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Page 10

Q A Section/Page# Book

1. A Page 64 BGA

2. A Article 8 A.I.A.701

3. D Page 318 BGA

4. D Page 179 BGA

5. A Page 174 BGA

6. C Page 253 BGA

7. B 9-12, 9-90, §713.13(2) Contractors Manual

8. B 9-98, §713.16(2) Contractors Manual

9. A §7.2.1 A.I.A.201

10. C 10-28 Contractors Manual

11. A 4-13 Contractors Manual

12. D 6-163 §440.185 Contractors Manual

13. C §12.3 A.I.A.201

14. B 736 Contractors Manual


16. A 3-64, 3-65 Contractors Manual

17. B 2-89, §489.1195 (2)(e) Contractors Manual

18. A 9-105, §713.23(1)(a) Contractors Manual

19. A 3-84(Chart) Contractors Manual

Note: Performance bond premium is a direct cost and not an

overhead costs.

Business and Finance Final Exam 1Answer Key


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Page 11

20. B 4-13 Contractors Manual

21. D 0 BGA

22. D 7-11 Contractors Manual


24. D §4.2.3 A.I.A.401

25. B Page 252 BGA (only fixed assets are depreciated)

26. A 2-199, Contractors Manual

61G4-20.001(2)(h)

27. D Page 179 BGA

28. D 2-86, 489.119 Contractors Manual

Note: not stated, but they refer to the approval process, so

logical.

29. B Page 120 BGA

30. B 2-90, §489.124(1) Contractors Manual

31. B Page 250 BGA

32. A 3-182, 5-277 Contractors Manual

33. A Page 253 or 327 BGA

34. B Page 169 BGA

35. B 9-81, 713.06(4)(a) Contractors Manual



38. B Page 162 BGA


40. C 1.1.1 A.I.A.201


42. C 7.3.4 A.I.A.201


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Page 12

43. C 5-281 Contractors Manual (Reemployment Section)

44. B 5-286 Contractors Manual (Reemployment Section)


46. D 3-156 Contractors Manual (Circular E Tax)

47. D Page 121 BGA

48. C Page 142 BGA

49. B 10-64 Contractors Manual

50. C Page 308 BGA


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