1 Exam Prep Business and Finance Practice Test 5

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1 1 Exam Prep Business and Finance Practice Test 5 1. According to Builder's Guide to Accounting, the most precise ratio used to judge whether the level of the inventory is correct for the volume of work to be done is:. A. cost of goods sold to average inventories B. sales to inventories C. cost of supplies to sales D. sales to cost of goods 2. According to Contractors Manual, how long does an employee have to give notice of an injury to the employer, in order to be covered under Worker's Compensation? A. 24 hours B. 7 days C. 15 days D. 30 days 3. Which of the following statements is false of a general partnership? A. general partners have unlimited personal liability B. fringe benefits are not generally tax deductible C. there are minimal administrative costs D there is a potential for double taxation of earnings 4. According to Builder's Guide to Accounting, in order to produce summaries for general ledger entries, cash sales should be listed by. A. customer's name B. date C. invoice number amount D. salesperson 5. What is the term for expenses that are actually paid but not recognized as paid until a later period? A. post paid costs B. deferred assets C. accrued expenses D. long-term liabilities 1 Exam Prep Business and Finance Test 5 1

2 6. According to the Florida Worker's Compensation Law, first aid cases requiring treatment on site that do not require medical treatment for which charges will be incurred, and do not disable the employee for more than, do not need to be reported. A. 3 hours B. 1 day C. 3 days D. 7 days 7. A contractor just starting in business must purchase Worker's Compensation Insurance if he has or more employees. A. one B. two C. three D. four The comparison of all credit and debit balances in the general ledger is known as a(an). A. trial balance B. balance sheet C. financial sheet D. income statement 9. In a contracting company that has more than one qualifying agent, a secondary qualifying agent is responsible for. A. the supervision of field work at sites where his license was used to obtain building permits B. the supervision of field work at sites where the secondary qualifying agent acts in a supervisory manner C. the financial matters for projects that used his license to obtain building permits D. the financial matters for projects where the secondary qualifying agent acts in a supervisory manner 10. What is the maximum amount of compensation that a consumer is entitled to if injured on a job site due to an unlicensed contractor's negligence? A. twice the amount of damages B. twice the amount of damages, plus attorney's fees C. triple the amount of damages D. triple the amount of damages, plus attorney's fees 1 Exam Prep Business and Finance Test 5 2

3 11. According to OSHA guidelines, you would classify a case as an injury, rather than illness, if the case. A. was caused by an instantaneous event B. requires medical attention C. requires the employee to miss less than 3 days of work D. was caused by exposure to environmental factors associated with employment 12. According to Contractors Manual, when developing a project schedule, which of the following should not influence the development of the project schedule? A. material delays B. equipment schedules C. crew sizes D. duration of activities 13. Which construction site requires a licensed contractor for the job? A. state university B. federal courthouse C. bank D. post office 14. The actual profits of a current job are higher than expected early in the job schedule. According to Builder's Guide to Accounting, what may this indicate? A. overall job profits will be lower B. labor and material need to be rescheduled for earlier dates C. the estimate was correct D. the job will finish late 15. A construction company has its main office in one county in Florida and has 12 job sites in 5 counties in Florida. The company is the prime contractor at each of these job sites and will be present at each site 12 months or more. Where is the company required to keep OSHA 300/300A log? A. at the main office only B. at every job site C. at one job site in each county D. at the OSHA office in Tallahassee 1 Exam Prep Business and Finance Test 5 3

4 16. According to Contractors Manual, an unfair labor practice charge must be received by the regional office with jurisdiction over the area where this alleged unfair labor practice occurred. What is the time limit to file this charge? A. 6 months B. 1 year C. 1-1/2 years D. 3 years 17. A contractor must serve a copy of the claim of lien on the owner and lender (if any) within how many days of the date the claim of lien is recorded? A. 15 B. 30 C. 60 D Which of the following must be true for a person to qualify for a state certification of competency? A. be a resident of the state of Florida B. be a minimum on 21 years of age C. be of good moral character and submit a financial statement D. be of good moral character, be at least 18 years of age and pass an examination 19. What type of insurance must all certified contractors carry and maintain to work in the state of Florida? A. fire, builder's risk, worker's compensation B. public liability and property damage in the amounts as set by the board C. liability, property damage and completed operations in the amounts as set by the board D. auto, independent contractor's liability, completed operations 20. According to the Federal unemployment Tax Act, if a contractor acquires a business from someone else who was an employer liable for FUTA tax, you. A. may count the wages that employer paid to the employees who continue to work for you when you figure the wage limit B. must pay a tax rate based on the premise that you are a new employer with new employees C. you may pay taxes based on percentage of days in balance of fiscal year D. may count the wages that employer paid to up to three employees who continue to work for you when you figure the wage limit 21. What liability category includes taxes payable? A. other B. long term C. contingent D. current 1 Exam Prep Business and Finance Test 5 4

5 22. According to Contractors Manual, automobile insurance rates are filed based on which factors? A. different size vehicles, distance of travel, various uses of the vehicles B. age and condition of vehicles, distance of travel, various uses of the vehicles C. different size vehicles, condition of vehicles, various uses of the vehicles D. various uses of the vehicles, different size vehicles, age of vehicles 23. According to Contractors Manual, a proposed short term project schedule should be reviewed by all the following except. A. in-house staff B. subcontractors C. critical material vendors D. building department officials 24. A contractor is considering entering a collective bargaining agreement with a union to represent the contractor's employees. What amount of support is required from the employees before the contractor may enter into this agreement? A. one half of the employees must support the action B. more than on half of the employees must support the action C. all of the employees must support the action D. support of the employees is not required 25. Which of the following statements concerning surety bonding is true? A. losses are not contemplated in surety bonds B. surety bonding is a two party agreement C. surety bonding uses the principal of indemnity to spread the losses among policy holders D. surety bonding uses the law of large numbers to determine premiums 26. A certified contractor currently qualifying one company is allowed to also serve as qualifying agent for an additional company if all fees are paid and. A. a local occupational license is issued in the name of the qualifying agent and the new company B. a favorable determination is issued by the Board after an investigation of the financial responsibility, credit, and business reputation of the contractor and the new company C. the contractor is not the sole qualifying agent for both companies D. another qualifying examination is taken and passed 27. According to the Contractors Manual, the project schedule of a construction contract will state that the work is to begin at which of the following specific times? A. the permit issuance date B. a particular calendar date C. the notice of commencement of the work D. a start date often described by a milestone 1 Exam Prep Business and Finance Test 5 5

6 28. Claims arising from damages that resulted from a contractor's work that already has been finished would be covered by a. A. completion bond B. commercial general liability policy C. builder's risk insurance policy D. manufacturer's and contractor's liability policy 29. According to the Builder's Guide to Accounting, is used to determine the owner's investment in a business versus the creditor's interest. A. current ratio B. quick assets ratio C. capital to current liabilities ratio D. the working capital to funded-debt ratio 30. According to the Builder's Guide to Accounting, which of the following is not considered a fixed overhead expense? A. office supplies B. collection expenses C. accounting and legal D. dues and subscriptions 31. Insurance premiums on Worker's Compensation are based on employer's classification code, and per of payroll. A. $1.00 B. $50.00 C. $ D. $1, According to Builder's Guide to Accounting, which of the following would be considered a fixed overhead account? A. utilities B. small tools C. operating supplies D. travel and entertainment 33. According to the Statues of Limitations in the Contractors Manual, how long does a person have to bring action on a wage recovery claim? A. 2 years B. 5 years C. 7 years D. 10 years 1 Exam Prep Business and Finance Test 5 6

7 34. According to Contractors Manual, "categories on the income statement" include all the following except. A. revenues B. expenses C. inventory D. income 35. What is a disadvantage of a network analysis? A. it is a tedious and exacting task if attempted manually B. it prevents any deviation from the scheduling being noticed quickly C. it prohibits splitting up the project into activities D. it prevents determining the shortest length of time for completion 36. Registration form SS-4 "Application for Employer Identification Number" must be filed (when applicable) on or before the. A.7t h day after the date on which business begins B. 14th day after the date on which business begins C. 30th day after the date on which business begins D. 60th day after the date on which business begins 37. According to Builder's Guide to Accounting, fixed expenses are. A. related to sales and direct cost, and vary with changes in volume and gross profit B. related to sales and direct cost, and do not vary with changes in volume and gross profit C. not related to sales and direct cost, and vary with changes in volume and gross D. not related to sales and direct cost, and do not vary with changes in volume and gross profit 38. According to Builder's Guide to Accounting, the best time to control costs is. A. monthly B. as problems arise C. as the job progresses D. at the time invoices are approved 39. Which of the following is an advantage of a regular corporation? A. limited taxation B. reduced record keeping C. tax deductible fringe benefits D. closely regulated 1 Exam Prep Business and Finance Test 5 7

8 40. According to Contractors Manual, if a construction company's federal employment taxes for the quarter ending September 30th have been paid on time, the IRS Form 941 for the quarter ending September 30th must be filed not later than. A. October 10th B. October 31st C. November 10th D. November 30 th 41 What is a necessary condition of being able to plot actual job progress from a cash flow standpoint? A. accurate recording of costs and expenses B. an accurate estimate of costs C. regular field inspections D. a bar chart schedule for activity network 42. Premiums for builders risk insurance are based upon. A. gross revenue from a project B. net profit from a project C. value of the work in place D. type of work used on the job 43. What is the maximum fine for failure to provide appropriate notice to the Division of Workers' Compensation for each injury/accident? A. $100 B. $250 C. $500 D. $1, Under Florida law, the beneficiaries of a worker killed in a covered workplace accident are entitled to. A. a $10,000 death benefit and $5,000 in funeral costs B. up to $100,000 in death benefits and up to $5,000 in funeral costs C. two thirds the employee's wages for life with 5% annual cost of living increase D. two thirds the employee's wages for 104 weeks plus up to $5,000 in funeral costs 45. What is the difference between salaried workers and hourly wage earners? A. salaried workers are paid for all overtime B. salaried workers always have a higher hourly rate of pay C. salaried workers never have time cards that reflect a specific job D. salaried workers receive the same base amount every pay period 1 Exam Prep Business and Finance Test 5 8

9 46. What type of insurance is issued to protect the contractor for loss of EARNINGS as a result of damage to or destruction of buildings or equipment? A. Business Interruption B. Business Floater C. General Liability D. Contractor Protective Liability 47. Within how many days after the subcontractor or supplier began work or furnished materials on the job must a Notice to Owner be given to the owner? A. 15 days B. 30 days C. 45 days D. 60 days 48. Which of the following is a numbered listing of the financial categories shown in the general ledger? A. chart of accounts B. income statement C. check register D. purchase order journal 49. Which method of accounting will result in the quickest revenue recognition? A. the completed contract method B. the partial contract method C. the percentage of completion method D. the percentage of billings to date method 50. As set forth by AIA documents, a construction change directive is a. A. request in writing by the owner B. verbal mandate executed by arbitration C. change in work to a subcontractor by a contractor D. written order prepared by the architect and signed by the owner and architect 1 Exam Prep Business and Finance Test 5 9

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11 ANSWER KEY 1. A Page 121 Builder's Guide to Accounting 2. D Ch. 6 Florida Contractors Manual 3. D Ch. 1 Florida Contractors Manual 4. B Page 38 Builder's Guide to Accounting 5. B Page 242 Builder's Guide to Accounting 6. D Ch. 6 Florida Contractors Manual 7. A Ch. 6 Florida Contractors Manual 8. A Page 250 Builder's Guide to Accounting 9. A Ch. 2, Florida Contractors Manual 10. D Ch. 2 Florida Contractors Manual 11. A Ch. 7 Florida Contractors Manual 12. C Ch. 10 Florida Contractors Manual 13. C Ch. 2 Florida Contractors Manual A bank is not government property and requires a licensed contractor for the job. 14. B Page 308 Builder's Guide to Accounting 15. B Ch. 7 Florida Contractors Manual 16. A Ch. 5 Florida Contractors Manual 17. A Page 9-30 Florida Contractors Manual 18. D Ch. 2, Florida Contractors Manual 19. B Ch. 2 Florida Contractors Manual 20. A Ch. 3 Circular E, Employer's Tax Guide in Florida Contractors Manual 21. D Page 253 or Page 327 Builder's Guide to Accounting 22. A Ch. 4 Florida Contractors Manual 1 Exam Prep Business and Finance Test 5 11

12 23. D Ch. 10 Florida Contractors Manual 24. D Ch. 5 Florida Contractors Manual 25. A Ch. 4 Florida Contractors Manual 26. B Ch. 2, (3)(b)(c) Florida Contractors Manual 27. D Ch. 8 Florida Contractors Manual 28. B Ch. 4 Florida Contractors Manual 29. C Page 269 Builder's Guide to Accounting 30. B Page 142 Builder's Guide to Accounting 31. C Ch. 6 Florida Contractors Manual 32. A Page 142 Builder's Guide to Accounting 33. A Ch. 8 Florida Contractors Manual 34. C Ch. 3 Florida Contractors Manual 35. A Ch. 10 Florida Contractors Manual 36. A Ch. 1 Florida Contractors Manual 37. D Page 142 Builder's Guide to Accounting 38. C Page 230, 231 Builder's Guide to Accounting 39. C Ch. 1 Florida Contractors Manual 40. C Ch. 3 Circular E, Employer's Tax Guide Florida Contractors Manual 41. A Page 11 Builder's Guide to Accounting 42. C Ch. 4 Florida Contractors Manual 43. C Ch. 6 Florida Contractors Manual 44. B Ch. 6 Florida Contractors Manual 45. D Ch. 3 Florida Contractors Manual 1 Exam Prep Business and Finance Test 5 12

13 46. A Ch. 4 Florida Contractors Manual 47. C Ch. 9, (2)(a) Florida Contractors Manual 48. A Page 12 Builder's Guide to Accounting Ch. 3 Florida Contractors Manual 49. C Ch. 3 Florida Contractors Manual 50. D Section AIA Document A201 1 Exam Prep Business and Finance Test 5 13