A 3-party contract between the surety, contractor and owner

A contractor installs a $1000.00 heat system ...with no riders. Which of the below is true?

The contractor is liable for the $1000.00

Which of the below is true about a partnership?

Must obtain a federal tax identification number

When a GC contracts with a sub-contractor who does not have workers compensation he:

Is completely responsible for workers compensation

What is the disadvantage of the cash method accounting versus the accrual method of accounting?

Cash method does not match revenue with expenses incurred

Profit margin if the net income is $ 10K, the liabilities are $ 5K and the assets are $ 3K?

Not enough information given to calculate

A cost plus contract is typically used when:

The labor costs are not specified

John inherited money,quit his job....His cost estimate has exceeded $565K ...Has he proceeded:*

Correctly-This is for his personal use,doesn't requ. license

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Business and Law

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#NC GC License - Business and Law

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Questions 164

Answers

1
a broken line on CPM schedule between 2 tasks, this represents __time between the 2 activities.
Activity
Duration
Total
Slack or float
2
Which of the statements below is correct?
1. Employees should receive a W-2 before 01/31 from employer
None of the above
2. Sub-contrac. should receive 1099 before 01/31 from the GC
Both 1 and 2 are true
3
What does the letter “i” on a CPM (Critical Path Method) Schedule indicate?
End of an activity
Start of an activity
Amount of float time
Duration of an activity
4
Which of the following is an advantage of a Subchapter S – Corporation form of business?
Limitations on corporate activities
Avoidance of double taxation
Limited life of business
Extensive regulation
5
Which of the following is considered to be part of company overhead?
1. Bonds
Both 2 and 3
3. Office rent
2. Accounting fees
6
A company has the following financial information, what is the profit for the year?
$ 10,000
0
7
What is the best information tool to determine labor cost for each task?
Field experience
Seasonal
Previous jobs
From the estimate
8
How many days does a business have to report a new hire?
30 Days
2 Weeks
20 Days
3 Days
9
What is the current Social Security rate?
6.20 %
7.65 %
1.45 %
6.84 %
10
You purchase special equip that was only to be used on 1 project, which would this be coded to?
General overhead
Equipment cost
Material cost
Direct cost
11
What is a bond?
A two- party contract between the surety and the contractor
A 3 party contract between the contractor, owner, developer
A 3-party contract between the surety, contractor and owner
A two-party contract between the surety, contractor, owner
12
contractor doesn't give the owner a written/verbal warranty...be left this type of warranty*
One year warranty
Implied warranty
No warranty
6 month warranty
13
How long must all records for employment taxes kept?
3 years
2 years
4 years
5 years
14
A contractor installs a $1000.00 heat system ...with no riders. Which of the below is true?
The owner pays the $1000.00
The contractor pays the deductible,the ins company pays $500
The contractor is liable for the $1000.00
The Insurance Company is completely liable.
15
Which of the below is true about a partnership?
The partners should have the same bank account
Must be a partnership to get partnership insurance
Must obtain a federal tax identification number
Partners are not liable for the other partner’s actions
16
Which of the following is not an advantage of a sole proprietorship?
Unlimited personal liability
Low start-up costs
Simple ownership
Sole ownership of profits
17
The employer should get I-9 forms from employees within how many days of hire?
Ten days
The day of hire
Two days
Three days
18
An 11 (eleven) month note due during a fiscal year is called:
Current liability
Long term liability
Working capital
Current asset
19
What is a disadvantage of an oral contract versus a written one?
No risk
Difficult to prove
Easier to expedite
Uncomplicated
20
Which of the below is not a part of a Source Document?
Time card
Check stub
Tax return
Deposit slip
21
Once a contractors license expires, period of time before contractor has to repeat license app?
30 Days
120 Days
60 days
4 Years
22
The document that shows the status of your company is:
Statement of cash flows
Balance sheet
Cash method
Income statement
23
What is more likely to be included in company or general overhead?
Storage facilities
Bonds
Insurance
Dumpsters
24
Which is mandatory for an employer to provide for an employee that is covered under the FLSA?
Holiday pay
Overtime pay
Sick pay
Vacation pay
25
When a GC contracts with a sub-contractor who does not have workers compensation he:
Must deduct the premium from sub-contractors pay
Must notify sub-contractors employees, inform them of this
Must buy separate insurance for them
Is completely responsible for workers compensation
26
When are the annual 940 tax reports due to the government?
December 31
By January 31
End of each quarter
January 15
27
How can you keep un-expected costs of materials down on a project?
None of the above
Wait on purchasing until market is reasonable
Purchase cheap material
Timely delivery schedule
28
FLSA provides that fed min wage of no less than $7.25/hr. What group of people...the fed min?*
Truck drivers
Minors under the age of 20
Factory workers
Office workers
29
The Fair Labor Standards Act (FLSA) applies to employers who have ____or more employees.
1
3
2
4
30
The ADA (Americans with Disabilities Act) applies to persons who have impairments such as:
Flu
Non-chronic conditions
Aids
Broken limbs
31
A contract must be written if it pertains to:
Two party agreements
Paid for by cash
Financing
Real estate or land
32
An employee is injured covered under workman’s compensation, which of the... for the employee?*
Loss of a leg
Loss of an eye
Loss of an arm
Loss of hearing
33
an employee of your firm, is paid on a 2 wk pay period, has worked the following schedule:*
$1,582.40
$1,545.6
None of the above
$1,562.80
34
If you accumulate a tax liability of $100,000 or more, you must make your deposit by:
15th of following month
Next banking day
15th of same month
Three banking days
35
If the contractor wishes to sign a contract ...the contractor do to indemnify the owner?*
Sign a contract with a change order clause
Sign a lump sum contract
Have higher performance bond
Talk to an insurance agent
36
If Fed. Unemp. tax wage period ends on 06/30, when is your tax deposit to the government due?
July 31st
July 15th
October 15th
October 31st
37
What is the disadvantage of the cash method accounting versus the accrual method of accounting?
Cash method does not match revenue with expenses incurred
None of the above
Cash method records expenses as they occur
Cash method recognizes income when services occur
38
What is the best method to accurately estimate costs of labor for a job?
Job cost history
Use of detailed plans and specs
Size of crew
Employee skill level
39
A company must have how many employees before workers' compensation is required?
Two
Three
Four
One
40
A contract offer made after having modified the original offer is called what?
Counter offer
Negotiation
Binding offer
Consideration
41
Profit margin if the net income is $ 10K, the liabilities are $ 5K and the assets are $ 3K?
$ 2,000.00
$ 8,000.00
Not enough information given to calculate
$ 5,000.00
42
A scheduling bar chart shows:
Time line relationship
Simultaneous events
Critical path
Relationship between tasks
43
What is the normal warranty period for a construction project?
24 months
3 months
12 months
6 months
44
If your Federal Unemployment Taxes are $ 5,000, when do you figure these taxes?
Semi weekly
Monthly
Daily
Quarterly
45
A cost plus contract is typically used when:
Depends on the number of units constructed
All of the costs are well defined
Allowances are used
The labor costs are not specified
46
Which of the below would not be included in a contract offer?
Scope of work
Sub-contractors
Price
Schedule
47
As a GC you have a project superintendent that is paid $25/hour, has worked 60 hrs in week...*
$350.00
$880.33
$525.00
$875.00
48
A Co has a truck that will be paid off before yr end, which category will this truck fall in?
Owners equity
Long term liability
Current asset
Current liability
49
A company’s debt ratio is .50, which best describes the company’s financial position?
Can weather downturns in the economy
Just hobbling along
Could undertake a large project
Close to bankruptcy
50
Where is a general contractor’s license displayed?
Office of qualifier
Place of business
Business file
Licensing board
51
John inherited money,quit his job....His cost estimate has exceeded $565K ...Has he proceeded:*
Correctly-He can build to his limitation ,do upgrades later.
Incorrectly-He join another GC with correct limitation.
Incorrectly-doesn't have license limit. to build @ this cost
Correctly-This is for his personal use,doesn't requ. license
52
How can you become more competitive in business
Improve safety
Less volume
Lower estimates
Additional volume
53
The following business type must pay state income tax:
Corporation
Partnership
All of the above
Sole proprietorship
54
home owner has $ 1K damage due to bad installation of ....Who is responsible for damages?*
Insurance company
Contractor and owner equally
insurance company and contractor
Contractor
55
A licensed GC agrees to pull a permit for un- licensed contractor...Which of the below is true?
Legal because he is responsible for pulling the permit
This is illegal,is subject to disciplinary action by board
This is legal because one contractor is licensed
Legal, the licensed contractor has agreed to be responsible
56
How many days do you have to notify the licensing board if your business is changing names?
60 Days
30 Days
90 Days
45 Days
57
ambiguous language in contract that can't be clarified, the interpretation would go against:
Neither party
The party who wrote the contract
The party the contract was sent to
Both parties
58
When do you file a 940 tax form?
The next business day following the ending quarter
The 15th day of the month following the ending quarter
The last day of the month following the ending quarter
The last day of the month of the ending quarter
59
The time located on a Critical Path Method chart for a specific task to the task is known as:
Start time
Float time
Total time
Duration time
60
When are Federal Unemployment Taxes (FUTA) due?
The last day of next month following the ending quarter
The beginning of the next month following the ending quarter
The middle of the next month following the ending quarter
The last day of the ending quarter
61
Employers are required by law to furnish 2 copies of form W-2 to ... the previous year before:*
January 15
March 15
December 31
January 31
62
How many employees are required before a written emergency action plan is needed?
8
9
10
11
63
The GC pays a brick mason $ 1.5K for work exceeding $600...Contractor must give him which form:
Form 1099
Form 940
Form W-2
Form 1040
64
Which of the below would not show up on a balance sheet?
Owners equity
Assets
Liabilities
Revenue
65
Long term liabilities are debt obligations that extend beyond ___year.
1
2
3
4
66
The contract bid documents include:
Invitation to bid
All of the above
Bid forms
Bid Instructions
67
Employers must pay matching funds for Social Security tax...the gross amount for Medicare tax?*
$95,000
Pay on all gross wages – there is no maximum
$90,000
$87,900
68
The maximum OSHA fine is:
$ 17,000
$ 70,000
$ 7,000
$ 10,000
69
What is the maximum EPA fine per day for failure to comply with regulations concerning lead?
$17, 500
$25,000
$7,500
$37,500
70
Which of the following best describes working capital?
Short term borrowed money
Cash on hand
Current assets minus current liabilities
Fixed assets minus fixed liabilities
71
Materials on hand stored on a construction project would be listed on the balance sheet as?
Fixed asset
Short term liability
Long term liability
Current asset
72
If the owner is 1 day late making pmt to a contractor and he walks off the job, which is true?
Material breach(contractor has violated contract condition)
Legal
Immaterial breach
Right
73
Which of the below is correct in reference to a balance sheet?
Assets + Owners Equity = Total Liabilities
Owners Equity – Assets = Total Liabilities
Assets = Liabilities + Owners Equity
Total Liabilities = Assets + Owners Equity
74
Which of the below would pay state tax on income generated?
S Corporations
Limited Liabilities
Partnerships
Corporations
75
What is the main difference between a Bar Graph and a CPM (Critical Path Method) schedule?
Bar graphs are chronological based on major or key events
CPM shows interaction with other events
76
A GC with a CGL (Commercial General Liab) ins policy of$ 1K...Which statement below is correct?
The ins company is responsible for $ 500 and the owner $500
The GC is responsible for the $ 1,000
The ins company is responsible for $500 and the GC $500
The owner is responsible for the $ 1,000
77
What is the percent withheld for Social Security and Medicare (FICA) taxes?
7.65 %
6.20 %
6.84 %
1.45 %
78
When an employee is voluntary/involuntarily terminated, when shall their wages be paid in full?
Not to exceed 20 days
The next day
Within 48 hours or next regular payday
End of the month
79
What is a fixed asset?
Property and equipment
Stock
Jobsite materials
Cash
80
Which of the following is considered to be part of company overhead?
Dumpsters
Storage facilities
Expenses
Bonds
81
lump sum contract on a project is $ 200K. The retainer=10%....What is left owed on the project?
$ 30,000 to $ 35,000
$ 25,000 to $ 30,000
None of the above
$ 35,000 to $ 40,000
82
If a qualifier leaves, which of the following is true?
license is good for 45 days max,licensee can re-take exam
The license is cancelled immediately
license is good for 30 days max,licensee can re-take exam
license is good for 60 days max,licensee can re-take exam
83
If your taxes are due on Saturday June 30th, when do you have to pay them?
Monday, July 2nd
Friday, June 29th
Saturday, June 30th
Sunday, July 1st
84
Which would a contractor on const site contribute to become more susceptible to water pollution
Sedimentation
Solid waste
Asbestos
Oil and grease
85
What type of contract is best between the owner and the construction manager?
Design build method of construction
Conceptual stage through final construction
Lump sum contract
Single prime method
86
What is the penalty for paying FUTA taxes 30 days late?
5 %
10 %
Still in the grace period
2 %
87
How many bids are required on public bid jobs?
1
2
4
3
88
What does the letter “j” on a CPM (Critical Path Method) Schedule indicate?
End of an activity
Duration of an activity
Amount of float time
Start of an activity
89
When two partners are financially responsible for $ 30,000, what is true?
Each partner is responsible for $ 30,000
Each partner is responsible for $ 15,000
90
The late start time minus the early start time on a CPM (Critical Path Method) chart is called:
Starting duration
Total duration
Total float
Late start
91
When compensating an employee for injury, which would the ins co be more liable for?
Loss of a leg
Loss of an arm
Loss of hearing
Loss of an eye
92
One of the main reasons that a construction contract could be voided or terminated is:
The contract between the parties has been los
None of the above
material breach occurs when party refuse to perform contract
A project has been substantially completed
93
When figuring the labor cost equation, which of the below should be figured in?
Equipment costs
Extra hours spent on planning and scheduling
Labor rate
Profit on the bottom line
94
Who is responsible for paying the Federal Unemployment Tax?
Not required in North Carolina
Tax is deducted from payroll check
Tax paid by employer...6.2% on first $7K paid to employee*
Both employee and employer is required to pay
95
Which of the following scheduling methods would be the most easier to read?
Calendar method
CPM (Critical Path Method)
Bar chart method
Neither of above
96
A contractor uses the accrual method of...bills of $3,000 in June. What is his profit for June?
3,000.00
1,000.00
2,000.00
4,000.00
97
If you, an owner, want to be guaranteed that your project ...What kind of bond would you need?*
Bid Bond
Performance Bond
Condition Bond
Payment Bond
98
A Co changing its address should report the address change to the NC Licensing Board in __days?
30 days
90 days
120 days
60 days
99
When choosing a CPA to do your accounting work, which of the below should be considered?
One that has the lest training in audited financials
The one that charges the least to help get business started
The closest one for easier convenience
A CPA that uses generally accepted accounting practices
100
Which accounting method is the best way to keep up with gross profits?
Cost accounting
Cash
Accrual
Contract accounting
101
Which of the below would be an annual depreciation method for an item?
Maintenance
Straight line
Operating
Cash
102
Which form would you use to obtain all of the federal tax withholding for an employee?
Form 941
Form W-2
Circular E: Employers Tax Guide
Form 940
103
Federal Unemployment Taxes ended on October 15th, when are these taxes due?FUTA Taxes-form 940.
November 30th
December 31st
January 31st
October 31st
104
There is a 50% partnership set up as an LLC doing business as (DBA). Which of the below is true
Need to form an LLP
Need to register business in each county
None of the above are needed
Need life insurance
105
What percentage of an employee’s pay must be withheld for worker’s compensation insurance?
1.45
7.65
6.20
0
106
What is the definition of Negotiation?
Change order
Contract acceptance
Diplomatic bargaining
Communicating with customers
107
What would be the total cost of workman’s compensation insurance for a company if the main...?*
$22,750
$25,223
$24,720
$23,823
108
Who is responsible for day to day activities on a construction project?
Owner
Architect
Project manager
Superintendent
109
Why is it important to fully understand a contract?
Legal capacity
Getting paid
Negotiation purposes
Prevent disputes
110
office trailer on a project that's been used on multiple projects, which would it be listed on?
Long term liability
Company overhead
Job overhead
Short term liability
111
This schedule should show the contractor is prepared to show working capital at anytime?
Calendar schedule
Bar chart schedule
Cash flow schedule
Cost comparison schedule
112
Where are the Material Safety Data Sheets (MSDS) originated from?
Provided by the contactor
Provided by the contract documents
Provided by the manufacturer of the chemical
Provided by the architect
113
What is the best definition of a bid bond?
Guarantees the contractor will do work at submitted price
Guarantees that all subcontractors, suppliers will be paid
Guarantees the work for a one year period
Guarantees that the contractor will complete the a contract
114
Which of the items below would not show up on an income statement?
Gross profit
Construction costs
Cash
Direct labor
115
Which of the below is not a key element of a contract?
Negotiations
Offer
Consideration
Acceptance
116
Employers must pay Unemployment Insurance taxes on employees how often?
Every six months
Weekly
Monthly
Quarterly
117
When estimating work, lower markup can result in:
Excessive work load
Sufficient cushion to weather hard times
Should be common practice
Insufficient cushion for excessive costs
118
AJ has a license in the name of AJ Construction, Inc.Name is she allowed to work under as a GC?
AJ Construction, Inc.
AJ Home Improvements
AJ DBA J Home Improvements
AJ Building
119
According to FLSA how many vacation days/year are employers required to provide employees?
8 hours
40 hours
45 hours
20 hours
120
A Co. has current assets of $250K and current liab. $180K ...,what is their bonding capacity.*
$750,000
$1,500,000
$700,000
$1,000,000
121
What is the most accurate estimating method?
Quantity take-off method
Square foot method
Unit price method
Conceptual method
122
What is a major advantage of a sole proprietorship ownership of a company?
Unlimited personal liability
Less capital
Easier to sell
Easier to obtain financing
123
A couple started ABC Co doing business under a DBA (doing business as), which is true?
Need to register business in each county
Need to form an LLP
Need life insurance
124
A contractor uses the accrual method of accounting. $6K billing ...What is his profit for June?
$ 5,000
$ 11,000
$ 4,000
$ 10,000
125
Your Comprehensive General Liability insurance protects you from which of the below?
2. Damage to property other than your company
Both 1 and 2
3. Injury to employees
1. Persons not employed by you
126
Determine the debt ratio if company assets are $100,000 and liabilities are $50,000.
.40
.20
.60
.50
127
Which of the below is not a contributing factor for low profit margin?
Accrual method of accounting
Low markup on estimate
Cash accounting method
Poor safety implemented
128
LLCs are like an S corp, fed inc taxes paid only on inc distributed to members as ordinary inc.
True
False
129
What is the quick ratio (sometimes referred to the acid test ratio) for the following:
2.27
0
130
How many days does an employee have to notify OSHA when he find...employer in for a violation?*
20 days
30 days
40 days
15 days
131
The income statement is sometimes called the profit-and-loss statement.
False
True
132
Liabilities are all debt...Current liabilities are debts that will...paid within ____year.*
3
2
4
1
133
The income statement is sometimes called:
Profit and loss statement
Gross profit
Net income
Working capital
134
The NC Employment Security Law says that all contractors are required to pay unemploy. tax if:
Both 1 and 2
2.Pay $1,500 in wages in any calendar qtr during calendar yr
1.Have 1 or more employees for 20 weeks during a calendar yr
Neither of the above
135
According to the FLSA (Fair Labor Standards Act) which would be classified as a laborer?
An exempt employee
An unskilled worker
A skilled worker
A nonexempt employee
136
A construction project budget tracking is based on:
Quality assurance
Cost estimate
Cash flow
Schedule
137
A contractor has a claim under his ....What is the insurance company liable for on this claim?*
$ 12,000
$ 10,000
Nothing
$ 11,000
138
A Co has $75K Assets,$120K LT Assets,$50K Liab, $60K LT Liab. what does it tell you about Co.?*
It can sustain it’s cash flow during a slow down
It can do a large bonded project
The company is struggling financially
It can’t meet its current obligations
139
Which of the below is an example of an indirect cost?
Equipment rental
Manager pay
Office rent
A superintendent’s year end bonus
140
All of the following are considered parts of a source document except:
Purchase orders
Time cards
Cash receipts
Tax returns
141
What contract accounting system would ...give you a better picture of your financial position?*
Accrual method
Completed contract method
Cash method
Percentage of completion method
142
What is the percentage withheld for Medicare tax?
6.22
6.20
1.45
6.84
143
On a CPM (Critical Path Method) schedule, what is the definition of “float time”?
Remaining time after task is complete until next task begins
Weather delay tasks not completed
Delays in delivery of materials
Tasks performed with limited access
144
At what age would an employer be required to obtain employment certificate to work an employee?
21 and over
Under 18
Under 21
16 or over
145
Quarterly tax deposits may be made using Form _____ if the tax liability is less than $2,500.
W-2
1099
941
940
146
When you involved in a partnership and one partner is ... partner responsible for?*
None of the above is correct
All of the debt or $30,000
Half of the debt or $15,000
None of the debt
147
A sub working for a GC on a state...GCs payment bond. What is the time period for doing this?*
30 days after last furnishing labor or materials
80 days after last furnishing labor or materials
60 days after last furnishing labor or materials
120 days after last furnishing labor or materials
148
When determining estimating costs framework, where is the group labor activities placed?
Equipment
Task
Labor hours
Labor rate
149
How many days do you have to complete legal action in order to enforce a lien?
120 days
220 days
180 days
240 days
150
Term used for money withheld from monthly pmts to a GC or sub til after completion of project?*
Monthly pay requests
Retainage
Withdraws
None of the above
151
Who is the Miller Act enacted for?
Architects and Engineers
General Contractors
Federal project bonding
Subcontractors
152
Quick ratio of a Co with total assets of $ 150K, liab of $ 35K, an inventory of equip of $ 52K?
2.8
4.1
3.2
1.4
153
Which document gives specific detail to determine type of material/method used in construction?
Construction drawings
Job plans
Specifications
Architectural drawings
154
How long must OSHA records be kept by an employer?
6 years
3 years
4 years
5 years
155
Where does the projected estimate versus actual estimated show on a balance sheet?
Current liability
Current assets
Long term assets
Long term liability
156
What is the best method for determining job labor costs?
Employees skill
Historical data
Accurate accounting
Detailed plans and specs
157
How can you help avoid material being stolen on a jobsite?
Have less inventory on site
Pile heavy items on top
Schedule large deliveries
Fence around
158
A worker works 40hrs/wk .. During 30 min lunch break, they required answer phone,Which is true*
Should be paid only 2.5 hours regular time
Should be paid extra 2.5 hours overtime
Receives no additional time paid under FLSA
Only required to receive 1.5 hours of regular time
159
Where will John’s wages fall on the company’s income statement?
General administrative expense
Project overhead
Direct Cost
None of the above
160
Which of the following is an advantage of a Sole Proprietorship?
Protects personal property from business liability
It conducts business as a separate legal entity
Unlimited personal liability
Business owner makes all decisions
161
Which of the following would not be a fixed asset?
Company vehicle
House or office
Land
Stocks and bonds
162
How often does a bank statement need reconciling or balancing?
Quarterly
Monthly
Weekly
Bi-monthly
163
If an owner wishes to sign a contract w/ a contractor that ...what type of contract is this?
Unit price
Lump sum
Cost plus
Have insurance agent review
164
Commercial General Liability Insurance (CGL) covers:
Bodily injury to non-employees
Personal injury, slander, damage to reputation
All of the above
Damage to property not belonging to business

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