Copyright Rob Estell...B. the cash flow statement C. the income statement D. the statement of...

Business and Finance 125 Question Final Exam

1. How many days prior to the date established in a contract for progress payments shall a contractor

submit to the architect application for payment?

A. 3

B. 5

C. 7

D. 10

2. Which is a method of improving cash flow?

A. maintaining a high inventory

B. taking advantage of discounts

C. converting all cash sales to accounts receivable

D. paying off liabilities

3. A subcontractor has a "Standard Form of Agreement Between Contractor and Subcontractor" with the

prime contractor on a project. The ONLY way the subcontractor can assign work on the subcontract is with

written ______________.

A. consent of the owner or architect

B. consent of the contractor

C. notification to the owner or architect

D. notification to the contractor

4. Who is eligible for Small Business Administration loans?

A. all building contractors in the United States

B. only company presidents

C. applicants who cannot obtain a loan from local banks

D. applicants who are recommended by a local bank

5. When can a Notice of Commencement be extended past one year?

A. if it is written into the Notice of Commencement

B. if the job proceeds past one year

C. when there is an architectural change order

D. never

6. According to AIA, the bidder making a bid represents that he/she ____________.

A. is familiar with local conditions under which the work is to be performed

B. is making a bid contingent on standard codes and conditions

C. will adjust accordingly if the bid is accepted as long as an addendum is made

D. will provide specifications for all materials

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7. A contractor receives payment from the owner of a construction project. The contractor shall pay the

subcontractor each progress payment within ________________.

A. 3 working days

B. 3 days (including Saturday and Sunday)

C. 5 working days

D. 7working days

8. Which is NOT a delay factor when determining production efficiency percentages?

A. accessibility of site

B. financial incentives

C. poorly trained personnel

D. weather conditions

9. When a piece of equipment is sold, why is it necessary to book the transaction separate from regular

sales?

A. treated as a variable expense

B. receives different tax treatment

C. transaction is not taxable

D. gains or losses must be used to adjust gross profits

10. According to Fair Labor Standards Act, which will eliminate the contractor's liability for paying

overtime pay?

A. an agreement that only 8 hours per day or 40 hours per week will be counted as working time

B. an outside salesperson who works on straight commission and qualifies as exempt

C. an announcement by an employer that overtime work will only be paid for if authorized in

advance

D. an announcement by an employer that no overtime work will be permitted

11. According to Florida Contractors Manual, which is an advantage of leasing?

A. lower overall cash flows than purchasing

B. reduced front-end cash outlays

C. generates depreciation for tax purposes

D. cheaper than owning in the long run

12. A change of a business address must be mailed to the Department of Business and Professional

Regulation within how many days of the change?

A. 30

B. 45

C. 60

D. 90

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13. All chains, being used as a sling, should be inspected once a ____________ by a competent inspector.

A. day

B. week

C. month

D. year

14. According to Florida Contractors Manual, which of the following is NOT a prohibited agreement under

Florida's Right to Work Law?

A. union shop agreements

B. agency shop agreements

C. federal enclaves agreements

D. maintenance of membership agreements

15. Which of the following is an example of an accrual entry?

A. depreciation and amortization entries

B. entries to record payroll taxes

C. entries to record automatic loan payments

D. entries to record purchase of material stored at jobsite

16. To establish an hourly cost for a piece of equipment, the contractor needs to consider all the following

except ________________.

A. estimated life of the equipment

B. cost of the equipment, less salvage value

C. replacement cost of the equipment

D. estimated average hours of use

17. Failure of a certificate holder or registrant to apply for renewal of an active certificate at the time of

biennial renewal shall cause the certificate to become ___________________.

A. temporarily suspended

B. permanently suspended

C. voluntarily inactive

D. delinquent

18. Which of the following best describes the accrual method of accounting?

A. transactions are recorded when cash is received or paid

B. no receivables or payables are recorded on the balance sheet

C. revenues are recognized when earned, even though no cash has been received

D. payables are recorded before receivables are received

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19. Which of the following is not a depreciation method recognized by Builder's Guide to Accounting?

A. declining balance depreciation

B. accumulated cost depreciation

C. sum of the years' digits depreciation

D. straight line depreciation

20. When a contractor requests a bond, which of the following will notbe considered by the surety industry

as one of the Three C’s of Underwriting?

A. character

B. comprehension

C. capacity

D. capital

21. What is the purpose of the Lien Law payment bond?

A. to exempt the contractor from construction liens

B. to exempt the subcontractor from construction liens

C. to protect the owner's property from construction liens

D. to allow easy payments to subcontractors

22. Under the Civil Rights Act of 1964 (Title VII) the Americans with Disabilities Act and the

Rehabilitation Act of 1973, the maximum compensatory and punitive damages a plaintiff may recover from

an employer of 95 people is ___________________.

A. $24,000

B. $50,000

C. $100,000

D. $250,000

23. According to National Council on Compensation Insurance, a contractor's worker's compensation

premiums can be reduced by any of the following, except __________________.

A. participating in a co-insurance program

B. joining an insurance pool

C. participating in a deductible program

D. requiring the employee to pay part of the premium

24. Under the Florida Civil Rights Act of 1992, (Chapter 760, FL. Statue) back pay liability is limited to

_______months prior to filing of complaint.

A. 6

B. 18

C. 24

D. 36

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25. An employer with 40 employees is cited by OSHA for a high severity, greater probability violation.

The employer has had one other citation in the last 3 years. Using ONLY the information given, what

would be the proposed penalty for this violation?

A. $8,730

B. $11,000

C. $15,472

D. $17,459

26. How long after the subcontractor's final furnishing of labor, services, or material for a job does the

subcontractor have for recording a valid Claim of Lien?

A. 45 days

B. 60 days

C. 90 days

D. one year

27. The quarterly Federal Tax Form 941 summarizes tax liability for the employer and includes _________

A. liability insurance

B. federal income taxes withheld

C. workers compensation insurance

D. federal unemployment insurance tax

28. A properly registered fictitious name is valid for ________________.

A. 1 year

B. 2 years

C. 3 years

D. 5 years

29. Which type of bond is a guarantee to the owner that the project will be completed according to the

terms and conditions specified in the contract?

A. payment bond

B. bid bond

C. performance bond

D. completion bond

30. According to the Internal Revenue Service, employers must keep all employment tax records for at

least how many years?

A. 2 years

B. 4 years

C. 5 years

D. 7 years

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31. For purposes of unemployment compensation, misconduct connected with work does not include

______________.

A. chronic absenteeism

B. conduct demonstrating conscious disregard of an employer’s interests

C. deliberate disregard of reasonable behavior standards

D. isolated instances of negligence and poor judgment

32. Which of the following companies would be required to have Worker's Compensation Insurance?

A. a company that is not in the construction business that leases 2 employees

B. a company in the construction business that hires employees

C. a corporation in the construction business with 2 employees who are both officers of the

corporation and have certificates of election to be exempt

D. a corporation that is not in the construction business with 2 employees who are both officers of

the corporation and have certificates of election to be exempt

33. A Notice to Owner from a non-privity lienor must be sent within ______days after the first furnishing

of labor or materials.

A. 30

B. 45

C. 72

D. 90

34. What financial information summarizes the existing conditions of a business?

A. the balance sheet

B. the cash flow statement

C. the income statement

D. the statement of retained earnings

35. According to Florida Contractors Manual, which of the following contracts are enforceable?

A. a contract for an unlawful purpose

B. an oral contract to sell a car for $750

C. an oral contract to sell a toolkit for $450

D. an oral contract to provide services for $500

36. When progress billings bring in more income than costs incurred during the early stages of a contract,

the contractor is using ____________________.

A. a draw system

B. a pre-qualified payment method

C. front end loading

D. the critical path method

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37. When preparing a bid, the contractor notes that the specifications require one type of equipment, but the

plans show a different type. The contractor should ____________________.

A. bid based on using the least expensive of the two

B. follow the plans

C. follow the specifications

D. substitute comparable equipment

38. Having received the list of subcontractors, the architect immediately objects to the use of plumber X's

company. The general contractor then proposes and uses plumber Y's company at a higher cost of $5,000.

What is the general contractor entitled to?

A. nothing

B. a time extension only

C. $5,000 plus a proven time extension

D. contract with owner needs to be re-negotiated

39. The term "lapping" refers to ____________ taken from the business by moving outstanding balances

from one customer account to another.

A. cash

B. equity

C. liabilities

D. receivables

40. What is required to file a construction claim of lien?

A. permission from the owner

B. a court order

C. a direct contract with the owner

D. the claim must be recorded with the clerk of the court

41. What ratios compare accounts on the balance sheet to accounts on the income statement?

A. quick assets

B. combined

C. income

D. current

42. Which is a requirement for an employee to recover under a compulsory State Workers' Compensation

Statute?

A. the injury must occur while the employee is engaged in interstate commerce

B. the injury must arise out of and in the course of employment

C. the injury must arise out of the negligence of the employer or fellow employee

D. the injured employee must be a permanent full-time employee

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43. What type of cost basis inventory valuation method uses the current market value of material as it is

used?

A. specific cost

B. first in-first out

C. last in-first out

D. cost-plus inflation

44. According Builder's Guide to Accounting, which is not used when calculating goods sold to average

inventory ratio?

A. labor

B. materials purchased

C. all other direct costs

D. total monthly averages

45. The Drug-Free Workplace Act of 1988 ________________.

A. does not require drug testing

B. always applies to subcontractors

C. applies to contractors in foreign countries

D. applies only to contractors with more than 50 workers

46. Which of the following can be added to a Builder's Risk policy by means of an extended coverage

endorsement?

A. vandalism coverage

B. malpractice coverage

C. materials in transit

D. catastrophic flood coverage

47. Which bond requires a low bidding contractor who fails to enter into a contract to pay a penalty equal to

the amount of the bid?

A. performance bond

B. forfeiture obligation

C. difference in bid

D. payment

48. The Statute of limitations requires that an action for breach of an unwritten contract must be brought

within a maximum of _______________.

A. 2 years

B. 4 years

C. 5 years

D. 7 years

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49. Which of the following wages would not be subject to Federal Unemployment tax paid by the

employer?

A. wages paid to a Canadian who frequently enters the U.S. to work as a carpenter

B. severance pay

C. wages paid to a deceased worker's estate in the same calendar year as the date

of the worker's death

D. wages paid to the employer's spouse

50. A contractor required to carry Worker's Compensation insurance may fulfill the requirements of the law

by ____________________.

A. obtaining liability insurance at three times the coverage generally required

B. seeking individual self-insured status through the Department of Labor and

Employment Security

C. obtaining major medical insurance for all employees

D. obtaining life insurance policies for all employees

51. 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

52. 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

53. 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

54. 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

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55. 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

56. 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

57. 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

58. 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

59. 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

60. What are two types of manpower estimates?

A. comparative and historical

B. graphic and detailed

C. preliminary and detailed

D. preliminary and historical

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61. Which of the following is NOT insurance?

A. Surety Bonding

B. Contractors Equipment Floater

C. Transportation Policy

D. Inland Marine Insurance

62. 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

63. 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

64. 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

65. 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

66. 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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67. 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

68. 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

69. 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

70. 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

71. 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

72. 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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73. 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'

74. 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

75. 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

76. 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

77. 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

78. 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

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79. 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

80. 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

81. 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

82. 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

83. Goodwill is an example of _______________.

A. an intangible asset

B. retained earnings

C. a current liability

D. equity

84. 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

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85. 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

86. 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%

87. 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)

88. 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

89. 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

90. 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

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91. 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

92. 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

93. 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

94. 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

95. 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

96. 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

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97. 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

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

A. utilities

B. postage

C. labor payroll taxes

D. rent

99. 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

100. 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

101. The Secretary of Labor has specifically prohibited employment in construction of anyone under what

age?

A. 14

B. 16

C. 18

D. 21

102. Which statement regarding leases is not true?

A. a lease-purchase agreement for equipment may require little or no initial investment

B. depreciation can be claimed on equipment that is lease-purchased

C. an immediate tax deduction is not available for the cost of monthly leases

D. for equipment that will be used for a brief period of time, leasing is cheaper than owning

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103. Dig Construction Company just bought a tractor for $212,000. They are going to depreciate it on a

straight line basis, using a 10 year useful life, and a salvage value of $14,000. What is the depreciation in

year 4?

A. $21,200

B. $21,000

C. $20,480

D. $19,800

104. Which person is required to be licensed under Florida Statutes Section 489.103?

A. persons who sell, service, or install heating or air conditioning units that have a capacity of less

than 3 tons with a power cord

B. registered architects or engineers acting within the scope of their practice

C. persons performing small remodeling jobs with a contract price of less than $2,500

D. highway, street, road, bridge or railway contractors

105. According to Builder's Guide to Accounting, a complete cash budgeting plan ______________.

A. does not address loan payments

B. ignores tax liabilities

C. controls the purchase of materials

D. addresses the type of business or business organization used

106. Under the Florida Worker's Compensation Act, a contractor may recover ________________ from a

subcontractor who has elected exemption from Chapter 440 if the subcontractor's exemption is invalid and

has caused liability to the contractor for an employee of the subcontractor.

A. benefits paid and interest due

B. a minimum of $1,500 and interest

C. penalties up to 100% of their contract

D. a maximum of $2,500 per occurrence

107. According to the Builder's Guide to Accounting, to find the supplies ratio ________________.

A. divide average inventories of supplies by cost of supplies used

B. divide raw materials used by average inventories of raw materials

C. divide cost of supplies used by the average inventories of supplies

D. use the current market value ratio

108. According to Florida Contractors Manual, construction project schedules should have progress posted

at least _________________.

A. daily

B. weekly

C. biweekly

D. monthly

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109. A fine of up _____________ to can be imposed on a contractor for proceeding on any job without

obtaining applicable local building permits.

A. $1,000

B. $3,000

C. $5,000

D. $10,000

110. An OSHA 300 safety log must be maintained by employers with at least _______employees.

A. 5

B. 7

C. 10

D. 11

111. OSHA 300, Log on Summary of Occupational Injuries and Illnesses, is used to record

_____________.

A. accident investigations

B. all health claims

C. all incidents resulting in loss of consciousness

D. non-work restricting injuries

112. According to Florida Contractors Manual, which formula is correct?

A. Assets - Liabilities = Equity

B. Assets + Liabilities = Owner's Equity

C. Assets = Owner's Equity - Depreciation

D. Owner's Equity = Liabilities – Depreciation

113. Which of the following is a current asset?

A. accounts payable

B. accounts receivable

C. construction equipment

D. furniture

114. According to AIA documents, change orders ________________.

A. must be prepared by the architect

B. always result in an adjustment of costs

C. don't necessarily describe a change in work

D. always result in a delay of completion of the job

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115. According to Florida Contractors Manual, which estimating method is NOT recommended for lump

sum contracts?

A. approximate estimated method

B. detailed survey method

C. square footage method

D. unit price method

16. When determining a project bid, which of the following expenses is considered an overhead expense?

A. costs of recruiting laborers for that job

B. materials needed for that job

C. purchases of small tools

D. rental of equipment to be used only for that job

17. What are the three C's of underwriting that the surety industry considers before a contractor can acquire

a bond?

A. character, cash and contracts

B. completion percentage, completed contracts and cash

C. cash, completion and contracts

D. capital, character and capacity

18. A typical purchase order should include all of the following EXCEPT ______________.

A. the billing and delivery address

B. a preprinted purchase order number

C. sales tax for purchase and for resale

D. an authorized signature

19. According to the Builder's Guide to Accounting, a definite plan for fixed assets should include all of the

following EXCEPT ________________.

A. records of maintenance cost

B. a determination if proposed equipment is useful for the job

C. a policy establishing depreciation rates

D. a study of lease vs. purchase options

20. A schedule of equipment time should include all of the following EXCEPT ______________.

A. scheduled time

B. the job number

C. consideration for adverse weather

D. repair time

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21. How is Florida sales tax reported and paid?

A. Reported on form DR-15-CS and paid on a monthly basis

B. Reported on form DR-15-CS and paid on a quarterly basis

C. Reported on form 941 and paid on a monthly basis

D. Reported on form 941 and paid on a quarterly basis

22. Expanding a business usually requires a great deal of capital to purchase new equipment, buildings or to

obtain long term financing. To qualify for expansion financing, financial institutes typically require that

you have been in business at least _____________, while ____________ is preferred.

A. 2 years; 4 years

B. 2 years; 5 years

C. 3 years; 5 years

D. 3 years; 6 years

23. Lydia is an employee of Built Construction and was paid $36,400 dollars last year. She is paid bi-

weekly, is married, and has three allowances. How much was withheld from her pay last year?

A. $3,288.90

B. $3,702.45

C. $3,959.62

D. $4,370.60

24. Unemployment/reemployment compensation laws apply to any employer who has one or more

employees, and either employed at least one employee for any portion of a day for 20 weeks during a year,

or paid ____________________.

A. $400 in wages during any calendar week

B. $600 in wages during any calendar month

C. $1,000 in wages during any calendar quarter

D. $1,500 in wages during any calendar quarter

25. Per the Florida Contractor’s Manual, which of the following bonds, if furnished in the full contract

amount, will protect an owner from liens for labor, services, and materials?

A. Fidelity Bond

B. Performance Bond

C. Payment Bond

D. Bid Bond

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Answer Key

Section/Page# Book

1. D 9.3.1 AI.A.201

2. B 262 BGA

3. B 7.4.2 AI.A.401

4. C 318, 319 BGA

5. A 9-88713.13(1)(c) Contractors Manual

6. A 2.1.3 AI.A.701

7. D 11.1.3 AI.A.401

8. B 10-30 Contractors Manual

9. B 170 BGA

10. B 5-15, 5-89, 5-124 Contractors Manual



13. C 7-89 Contractors Manual


15. D 237 BGA

16. C 159, 160 BGA

17. D 2-84, 489.116(4) Contractors Manual

18. C 11 or 237 BGA

19. B 163 BGA


21. C 9-46, 10-75 Contractors Manual


23. D 6-21, 6-37 Contractors Manual


25. A 7-32 Contractors Manual

(high severity, greater probability =base penalty of $12,471)

(adjustment factor = 30% for 26 to 100 workers)

Note: there is no 10% reduction for good past history because

there was one other violation in the last 3 years

Solution: $12,471 x .70 (100% - 30%) = $8,729.70

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26. C 9-27, 9-84 §713.08(5) Contractors Manual

27. B 137, 138 BGA

3-177 Contractors Manual (Tax Guide)

28. D 1-15 Contractors Manual


30. B 3-154 Contractors Manual ( Tax Guide)



33. B 9-21, 9-76 713.06(2)(a) Contractors Manual

34. A 247 BGA


36. C 3-108, 10-74 Contractors Manual


38. C 5.2.3 A.I.A.201

39. A 181 BGA

40. D 9-84, §713.08(5) Contractors Manual

41. B 270 BGA

42. B 6-26, 6-85 440.09(1) Contractors Manual

43. C 120 BGA

44. D 121 BGA





49. D 3-184 Contractors Manual (Tax Guide)


51. A Page 64 BGA

52. A Article 8 A.I.A.701

53. D Page 318 BGA

54. D Page 179 BGA

55. A Page 174 BGA

56. C Page 253 BGA

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

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

59. A §7.2.1 A.I.A.201



62. D 6-163 §440.185 Contractors Manual

63. C §12.3 A.I.A.201

64. B 736 Contractors Manual


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

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

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

69. A 3-84(Chart) Contractors Manual

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

overhead costs.


71. D Page 120 BGA



74. D §4.2.3 A.I.A.401

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

76. A 2-199, Contractors Manual

61G4-20.001(2)(h)

77. D Page 179 BGA

78. D 2-86, 489.119 Contractors Manual

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

logical.

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79. B Page 120 BGA

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

81. B Page 250 BGA

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

83. A Page 253 or 327 BGA

84. B Page 169 BGA

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



88. B Page 162 BGA


90. C 1.1.1 A.I.A.201


92. C 7.3.4 A.I.A.201

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

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


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

97. D Page 121 BGA

98. C Page 142 BGA


100. C Page 308 BGA


102. C Page 169, 170 BGA

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103. D Page 163 BGA

Total Price - Salvage Value = Total Amount to be Depreciated

$212,000 - $14,000 = $198,000

Amount to be Depreciated ÷ Years of Life = Straight Line

Depreciation per Year

$198,000 ÷ 10 = $19,800

Note that Straight Line Depreciation is the same in each year.

104. C 2-66, 489.103(9)(a) Contractors Manual

105. C Page 173, 174 BGA


107. C Page 121 BGA


109. D 2-95, 489.129 (o) Contractors Manual




Assets = Liabilities + Equity; therefore Assets - Liabilities =

Equity

113. B Page 327 or 252 BGA

114. A Section 7.2.1 A.I.A.201


116. C Page 142, 143 BGA


118. C Page 116, 117 Builder's Guide to Accounting

(KEY WORD - "NOT for resale")

119. B Page 156 BGA

120. C Page 159 BGA



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123. B 3-171, 3-200 Contractos Manual (Circular E Tax Guide)

Annual pay is $36,400, so bi-weekly pay is $1,400

Medicare = 1.45%, $1,400 x .0145 = $20.30

Social Security = 6.2% $1,400 x .062 = $86.80

Income Tax = $61.00 (bracket on page 3-200)

$20.30 + $86.80 + $61.00 = $168.10 (bi-weekly). $168.10 x 26

= $4,370.60 annually

124. D 5-52, 5-277 Contractors Manual

125. C 9-46, 9-105 713.23 Contractors Manual

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