1 Exam Prep Business Procedures Practice Test 2

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1 1 Exam Prep Business Procedures Practice Test 2 Note: Questions with * are for Broward County Exams. If your exam is not for Broward County, please skip these questions 1. An employee is injured on Monday, and returns to work upon the following Monday. How many lost work days should be reported? A. Seven B. Six C. Five D. Four 2. You should calculate federal unemployment taxes for deposit purposes. A. Annually B. Quarterly C. Monthly D. Biannually 3. Which type of business organization is taxed like a partnership but provides limited liability to the owner/operators of the business? A. Any type B. Limited partnership C. Subchapter "S" corporation D. Corporation 4. Furnished material as covered by the Construction Lien Law includes. A. Supplied materials included in the improvement, excluding normal waste. B. Rented tools excluding hand tools. C. Rented tools including hand tools. D. Fabricated materials in the raw state when still in the manufacturing process 5. Any agreement by an employee to contribute to a benefit fund to provide medical services as required by Workers' Compensation. A. Is Invalid B. Is not in violation of Workers Compensation. C. Is a misdemeanor. D. Is valid as long as one registers the agreement with the department of insurance. 1 Exam Prep Business Procedures Practice Test 2 1

2 6. The child labor provisions of the Fair Labor Standards Act include restrictions on the hours of work for minors under the age of. A. 14 C. 16 B. 15 D Which of the following is not generally considered an employee for federal tax purposes? A. A supervisor B. A part-time employee C. A construction contractor D. An officer of a corporation 8. Which of the following is considered a company's asset? A. Debts owed by the company B. Cash holdings of the company C. Accounts payable D. Net Worth *9. The general procedure for hearings shall be in such form as shall be approved by the office of the county attorney and each party shall have the following rights: A. To call and examine witnesses B. To introduce exhibits C. To rebut the evidence D. All of the above 10. An installment of Workers' Compensation payable without an award is due on July 1st, but payment is delayed until July 10th. An additional should be added to the payment. A. 12%, $5.00 min. B. 20% C. 10% D. A and B 11. A company with fewer than employees is considered a small business for record keeping purposes. A. 11 C. 100 B. 50 D The rate of contribution to Social Security from employees is _. A. 4.2% B. 6.2% C. Both B and C D. 7.65% 1 Exam Prep Business Procedures Practice Test 2 2

3 13. One advantage of the Completed Contract Method of accounting is that. A. It represents the contractors current financial status. B. A job is complete when the warranty expires. C. It allows the contractor to defer income taxes until the project is completed. D. The company taxes for the fiscal year can be computed throughout the project. 14. Willful violations of the FLSA may be fined to a maximum of. A. $1,000 C. $5,000 B. $3,000 D. $11, Which of the following is a true statement concerning Workers Compensation coverage? A. Employees can agree to pay a portion of the Workers Compensation premiums, if agreed to in writing. B. An employer will be obligated to rehire an employee, if the employer has 40 employees. C. Employers who understate payroll to the carrier can be penalized 15% plus the additional premium. D. An employer who fails to provide the required Workers Compensation may be fined 1.5 times the amount that should have been paid or $1,000, whichever is greater. 16. When an employee is killed on a job, you have to report it to OSHA. A. 48 hours C. 8 hours B. 12 hours D. 24 hours 17. Provided you have deposited all FUTA taxes timely, you have until to file Form 940. A. Dec. 31 B. Jan. 31 C. Feb. 10 or 11 D. Feb A business that desires to be successful, stay alive, and show profits needs to develop a clear plan of action. Such a plan starts with. A. An organization chart B. A business environment C. A business blueprint D. Goals 19. Persons in privity with the owner may not claim a lien for which of the following? A. Labor furnished by him. B. Services furnished by him. C. Materials furnished but Claim of Lien not recorded. D. Materials furnished to the job by him. 1 Exam Prep Business Procedures Practice Test 2 3

4 20. An employee refuses to observe safety rules and use safety equipment His Workers' Compensation. A. Will not be affected B. Will be reduced 25% C. Will be reduced 50% D. Will not be paid, because he contributes to an accident 21. OSHA reporting requirements state that contractors do not need to record minor first aid injuries that occur at work. Which of the following is considered 'minor' first aid? A. Treatment of an infection B. Cutting away dead skin C. Applying a bandage to a cut on an employee's hand. D. Applying an adhesive dressing to an employee's shoulder 22. Form 941 or 941E is filed on a basis. A. Monthly B. Bimonthly C. Weekly D. Quarterly 23. The form of business ownership in which the owner has all the legal rights to make the decisions for the business is called a. A. Sole proprietorship. B. Partnership. C. General partnership. D. Corporation. 24. If action is not begun to enforce a lien in court, a recorded lien is good for. A. 45 days B. 60 days C. 90 days D. 1 year 25. An employer pays a lump sum payment to a claimant without an attorney releasing the employer from future liability. The employer has. A. Broken the law. B. 90 days to provide the claimant with an attorney C. To get permission from a judge. D. 120 days to file a notice of denial. 1 Exam Prep Business Procedures Practice Test 2 4

5 26. If a citation for violation of OSHA rules is issued to an employer, the employer has working days after receipt to notify the Area Director that he intends to contest the citation. A. 10 C. 20 B. 15 D An employer owes $ in FUTA tax for the first quarter, to file a quarterly return FUTA tax return for this amount, you must use. A. Form W-2 B. Form 940 C. Form 941 D. None of the above 28. A non-exempt employee earns a salary of $175 per week on a fluctuating work week and works 50 hours in a particular week, what is her gross pay? A. $218 C. $283 B. $175 D. $ If liabilities were $260, and net worth was $125,453.89, assets would have been. A. $134, B. $244, C. $385, D. Not enough information to determine. 30. For a death by accident, an employer must pay actual funeral expenses within. A. 14 days after the employer receives the bill... not to exceed $7500 B. 14 days after the actual date of the funeral... up to $5000 C. 10 days after the initial report of death is filed with the division of labor D. 10 days after the insurance company is notified of the death 31. The recording of a Notice of Commencement constitutes a on the property. A. Lien B. Cloud C. Encumbrance D. None of the above 32. Regarding federal taxes, which of the following statements is incorrect with regard to the Employer Identification Number? A. You should have only one identification number B. Form SS-4 is the form used to apply for an ID number C. If you acquire the business of another employer, use his number D. You may file a tax return before receiving an ID number 1 Exam Prep Business Procedures Practice Test 2 5

6 33. If assets were $456, and net worth was $87,097.56, liabilities would be. A. $543, B. $369, C. $369, D. Not enough information to determine. *34. The maximum payment which can be applied from the recovery fund against any one license holder in is: A. The restitution amount C. $5,000 B. $5,000 plus damages D. $25, According to the Workers' Compensation law, the term "accident" means which of the following? A. An unplanned event. B. An unexpected or unusual event happening suddenly C. A sudden forceful stress resulting in the injury of an employee D. An unfortunate occurrence *36. The Central Examining Board shall have the power to: A. Take testimony under oath B. Spank the violator C. Assess fines up to $10,000,000 D. Render contracts unenforceable 37. You employ your 17-year-old daughter as a secretary for the three summer months at $1,500 per month. Your tax liability is. A. Income Tax, Social Security, and Federal Unemployment Tax B. Income Tax and Federal Unemployment Tax C. Social Security and Federal Unemployment Tax D. Income Tax only 38. One of the greatest disadvantages of sole proprietorships in the financial management of a company is. A. The owner has unlimited personal liability. B. Keeping business and personal funds in separate accounts. C. Maintaining a full set of books and records. D. Operating a business under a separate Federal I.D. number. 39. Under the definition of labor in the Construction Lien Law, who of the following is qualified as a laborer? A. A person performing labor and supplying some of the materials. B. A person supplying material and labor of others. C. A person doing land surveying and site improvement. D. A superintendent furnishing services only. 1 Exam Prep Business Procedures Practice Test 2 6

7 40. In case of temporary partial disability, compensation shall be equal to 80 percent of the difference Between of the employee's average weekly wage and the pay the employee is able to earn. A. 90 percent B. 80 percent C. 20 percent D. 50 percent 41. Which of the following records do not have to be kept according to the FLSA? A. Total hours worked each workday and workweek B. Social Security numbers C. Regular hourly pay rate D. Date of payment and pay period covered 42. Your un-deposited withholding tax and Social Security tax totals $2, At the end of the month you must deposit these taxes on or before the of the following month. A. 30th day B. 15th day C. 10th day D. 7th day 43. Under the Construction Lien Law, a Claim of Lien means: A. The lienor has made his claim verbally. B. The lienor has notified the contractor in writing C. The lienor has recorded his claim as provided by law D. None of the above *44. In order for an individual who has been issued a certificate of competency by any county within the State of Florida to be certified pursuant to subsection (a) of this section, the individual must first affirmatively show that: A. The category, class and level of certification for which the individual is certified is the same or similar to a category, the board; and class or level established by this chapter B. The county, upon whose certification the individual is basing the request for certification pursuant to this section, extends the same certification privileges to individuals certified by the board. C. The individual meets the standards established by section 9-7(b) of this chapter if the individual proposes to qualify a business organization or contract or subcontract in the category or class for which such individual is seeking certification D. All of the above 1 Exam Prep Business Procedures Practice Test 2 7

8 45. Due to a job related injury described in the previous question, the employee is able to return to work in a limited capacity position for two weeks. The employee works 20 hours per week at the minimum wage. The Workers Compensation disability benefits for the two week period would be. A. $ B. $ C. $65.00 D. $ THE NEXT THREE QUESTIONS CONTAIN THE FOLLOWING INFORMATION. (#46 #48) 46. Using the figures below, the current ratio is. A B C D Cash $ 229, Inventory $ 6, Total Current liabilities $ 188, Net income $ 15, Sales $ 632, Using the figures above, a more accurate test for current ratio (quick ratio) yields. A.0.8 B C D Using the figures above, the margin of profit is. A. 2.45% B. 6.55% C. 8.22% D % 49. A lien against the property may be transferred to other security by. A. Depositing a sum of money at the county clerk's office. B. By filing with the county clerk's office a bond executed as surety by a surety insurer licensed in the state equal to an amount of $2,500. C. Through action of the lienor. D. None of the above. *50. A Code Enforcement Officer who finds that a violation has continued beyond the date specified in the notice of violation shall include in the violation. A. Date and time of issuance B. How many workers were on the jobsite C. Name of code enforcement officer D. All of the Above 1 Exam Prep Business Procedures Practice Test 2 8

9 1 Exam Prep Business Procedures Practice Test 2 Answers 1. Ans B. Safety General Recording criteria. See (b)(3)(iv) on Pg 348. Count calendar days off. Do not count the day the illness began, (b)(3)(i). 2. Ans. B. Circular E, When to Deposit? 3. Ans C. Chapter 9, Pg 359, "S" Corporation 4. Ans A. Sec , Definitions, (12), Pg Ans A. Sec , Invalid Agreements (1), Pg Ans C. FLSA Youth Employment, Pg Ans C. Circular E, Who Are Employees? 8. Ans B. Chapter 10. See Sample Balance Sheet, Pg Ans D. Broward County Ch. 9, Section: Ans D. Sec , Time for payment, Pg 247. See (6)(a), Pg 248 for Ans B and (8)(a), Pg 249 for Ans A. 11. Ans A. Safety , Partial exemption. See (a) (2), Pg 341. Ten or fewer. 12. Ans A. Circular E, Social Security & Medicare Taxes 13. Ans C. Chapter 10. Completed Contract, Pg Ans D. FLSA Enforcement, Pg 312. Note that Willfull violations have a max fine of $10,000, but violations of youth employment have a penalty of $11,000 for each employee. 15. Ans D. A: Sec , Prohibited activities, (4)(a)2., Pg 198, False. B: Can't find, assume False. C: (6), False. D: Sec (7) (d), Pg 203, True. 16. Ans C. Safety , General Recording criteria. See (b)(2) on Pg Ans C. Circular E, When to Deposit 18. Ans D. Chapter 9, Plan, Pg Ans C. Sec , Liens of persons in privity, Pg113. "No lien...until a claim of lien is recorded." 20. Ans B. Sec , Coverage, Pg 179. See (5), Pg Ans C. Safety , General Recording criteria. See "First Aid" defined, (b)(5)(ii), Pg 351. See (b)(5)(ii)(d), "bandages", Pg Ans D. Circular E, File Form Ans A. Chapter 9, Pg 358, Sole Corporations. Proprietorship. 24. Ans D. Sec , Duration of Lien (1), Pg Ans D. Sec , Pg 247, Time for payment. Find. "daiment not represented by counsel", (11)(a), Pg Ans B. Safety , Proposed penalties, Pg 325. See (a). 27. Ans D. Circular E, Depositing FUTA taxes. Note: Form 940 is used to report FUTA but answer is none since it is under $ Ans C. FLSA Pages 306 $175/50= $3.50 but minimum wage of $5.15 applies, so 40 x 5.15 = 206, OT=10 x 5.15 x 1.5 = 77.25, so = Ans C. Chapter 10 Sample Balance Sheet, Pg 365. Assets = Net Worth + Total Liabilities. Assets = $125, $260,000 = $385, Ans A. Sec , Compensation for death, Pg.239. See (1)(a) Ans D. Sec , Notice of Commencement, Pg 124. See (3), Pg Ans C. Circular E, Employer Identification Number (EIN) 33. Ans B. Chapter 10. Liabilities = Assets - Net Worth = $456, $87, = $369, Ans C. Broward County Ch. 9, Section: 9-143(a) 35. Ans B. Sec , Definitions, Pg 166. Item (1). 36. Ans A. Broward County Ch. 9, Section: 9-29(10) 1 Exam Prep Business Procedures Practice Test 2 9

10 37. Ans D. Circular E, Family Employees 38. Ans A. Chapter 9, Pg 358, SoleProprietorship. 39. Ans D. Sec , Definitions, (15), Pg Ans B. Sec , Compensation four Disability, Pg 230. See (4) TEMORARY PARTIAL 41. Ans B. FLSA Computing overtime pay, Pg 311. Math: Base pay rate (wk 2): $ hrs = $5.20/hr. OT pay: = $5.20/hr x1 x 10 hrs = $26. Total = $260 + $26 = $ Ans B. Circular E, Monthly Deposit Schedule 43. Ans C. Sec (3). Definitions, Pg Ans D. Broward County Ch. 9, Section: 9-12(b) 45. Ans B. Sec (4)(a) Temporary Partial Disability, Pg 234. Difference = (Avg weekly wage x 80%) minus new wage. Minimum wage = $5.15/hr (Chapter 7, Employment regulations, Basic wage Standards, Pg 306). New wage = $5.15 x 20 hrs = $103/wk. Difference = ($210 x.80) -$103 = $65 x 80% x 2 wks = $ Ans B. Chapter 10. Ratios, Pg 365. Current ratio = Current assets + Current liabilities = $236,352 + $188, = Ans D. Chapter 10 Ratios, Pg 365. Quick Ratio = (Current Assets - Inventory) + Current liabilities = ($236,352 - $6,455.80) + $188,153.17= Ans A. Chapter 10. Ratios, Pg 365. Margin of profit = Net income divided by Revenues = $15, $632, = 2.45%. 49. Ans A. Sec , Transfer of liens, Pg 145. See (1) (a). 50. Ans D. Broward County Ch. 9, Section: 9-121(c) 1 Exam Prep Business Procedures Practice Test 2 10