Florida General Contractor Business and
Finance Final 2026 Exam Practice Test |
100 Multiple-Choice Questions & Answers
1. Which financial statement primarily reports a company's assets,
liabilities, and owner's equity at a specific point in time?
A. Income statement
B. Cash-flow statement
C. Balance sheet
D. Job-cost report
Rationale: The balance sheet presents the financial position of a
business at a specific date by showing assets, liabilities, and equity.
2. Which formula correctly represents the accounting equation?
A. Assets + Liabilities = Equity
B. Assets − Equity = Revenue
C. Assets = Liabilities + Equity
D. Revenue = Assets + Expenses
Rationale: The fundamental accounting equation states that total assets
equal total liabilities plus owner's equity.
3. A contractor purchases $15,000 of materials on credit. What is
the immediate effect on the balance sheet?
A. Assets decrease and liabilities decrease
B. Assets increase and equity decreases
C. Equity increases and liabilities decrease
D. Assets increase and liabilities increase
,Rationale: Materials increase the company's assets while the unpaid
supplier invoice increases accounts payable, a liability.
4. Which account represents money owed to a contractor by
customers for completed work that has not yet been collected?
A. Accounts payable
B. Accrued expense
C. Accounts receivable
D. Retained earnings
Rationale: Accounts receivable represents amounts customers owe the
business for goods or services already provided.
5. Which account represents amounts a contractor owes to suppliers
for materials purchased on credit?
A. Accounts receivable
B. Accounts payable
C. Gross profit
D. Work-in-progress revenue
Rationale: Accounts payable records unpaid obligations to vendors and
suppliers.
6. A contractor's total revenue is $800,000 and total direct job costs
are $600,000. What is the gross profit?
A. $100,000
B. $150,000
C. $200,000
D. $1,400,000
Rationale: Gross profit equals revenue minus direct costs: $800,000 −
$600,000 = $200,000.
7. What is the primary purpose of a job-costing system?
,A. To determine employee vacation time
B. To calculate personal income taxes
C. To track costs associated with individual projects
D. To replace construction contracts
Rationale: Job costing allows a contractor to track labor, materials,
equipment, subcontractor, and other costs by project.
8. Which cost is normally considered a direct cost of a construction
project?
A. Office rent
B. Accounting department salary
C. Lumber installed on the project
D. Corporate advertising
Rationale: Materials incorporated into a specific project can generally
be directly assigned to that job.
9. Which expense is most likely an indirect overhead cost?
A. Concrete placed in a foundation
B. Drywall installed in a building
C. Labor used exclusively on one project
D. Office rent
Rationale: Office rent supports the overall business rather than being
attributable to one particular construction project.
10. What is the purpose of a construction project budget?
A. To eliminate all project risk
B. To establish expected revenues and costs for comparison with
actual results
C. To guarantee a project's profitability
D. To replace the construction contract
, Rationale: A budget provides a financial plan against which actual
project performance can be measured.
11. A contractor estimates a job will cost $500,000 and wants a 20%
markup based on cost. What selling price should be used?
A. $520,000
B. $550,000
C. $600,000
D. $625,000
Rationale: A 20% markup on $500,000 is $100,000, producing a selling
price of $600,000.
12. Which statement best describes gross margin?
A. Total liabilities divided by assets
B. Net income divided by liabilities
C. Gross profit expressed as a percentage of revenue
D. Current assets minus current liabilities
Rationale: Gross margin measures gross profit relative to revenue and
is commonly expressed as a percentage.
13. A contractor has $300,000 in current assets and $150,000 in
current liabilities. What is the current ratio?
A. 0.5:1
B. 1:1
C. 2:1
D. 3:1
Rationale: Current ratio = current assets ÷ current liabilities =
$300,000 ÷ $150,000 = 2.
14. What does a high current ratio generally indicate?
Finance Final 2026 Exam Practice Test |
100 Multiple-Choice Questions & Answers
1. Which financial statement primarily reports a company's assets,
liabilities, and owner's equity at a specific point in time?
A. Income statement
B. Cash-flow statement
C. Balance sheet
D. Job-cost report
Rationale: The balance sheet presents the financial position of a
business at a specific date by showing assets, liabilities, and equity.
2. Which formula correctly represents the accounting equation?
A. Assets + Liabilities = Equity
B. Assets − Equity = Revenue
C. Assets = Liabilities + Equity
D. Revenue = Assets + Expenses
Rationale: The fundamental accounting equation states that total assets
equal total liabilities plus owner's equity.
3. A contractor purchases $15,000 of materials on credit. What is
the immediate effect on the balance sheet?
A. Assets decrease and liabilities decrease
B. Assets increase and equity decreases
C. Equity increases and liabilities decrease
D. Assets increase and liabilities increase
,Rationale: Materials increase the company's assets while the unpaid
supplier invoice increases accounts payable, a liability.
4. Which account represents money owed to a contractor by
customers for completed work that has not yet been collected?
A. Accounts payable
B. Accrued expense
C. Accounts receivable
D. Retained earnings
Rationale: Accounts receivable represents amounts customers owe the
business for goods or services already provided.
5. Which account represents amounts a contractor owes to suppliers
for materials purchased on credit?
A. Accounts receivable
B. Accounts payable
C. Gross profit
D. Work-in-progress revenue
Rationale: Accounts payable records unpaid obligations to vendors and
suppliers.
6. A contractor's total revenue is $800,000 and total direct job costs
are $600,000. What is the gross profit?
A. $100,000
B. $150,000
C. $200,000
D. $1,400,000
Rationale: Gross profit equals revenue minus direct costs: $800,000 −
$600,000 = $200,000.
7. What is the primary purpose of a job-costing system?
,A. To determine employee vacation time
B. To calculate personal income taxes
C. To track costs associated with individual projects
D. To replace construction contracts
Rationale: Job costing allows a contractor to track labor, materials,
equipment, subcontractor, and other costs by project.
8. Which cost is normally considered a direct cost of a construction
project?
A. Office rent
B. Accounting department salary
C. Lumber installed on the project
D. Corporate advertising
Rationale: Materials incorporated into a specific project can generally
be directly assigned to that job.
9. Which expense is most likely an indirect overhead cost?
A. Concrete placed in a foundation
B. Drywall installed in a building
C. Labor used exclusively on one project
D. Office rent
Rationale: Office rent supports the overall business rather than being
attributable to one particular construction project.
10. What is the purpose of a construction project budget?
A. To eliminate all project risk
B. To establish expected revenues and costs for comparison with
actual results
C. To guarantee a project's profitability
D. To replace the construction contract
, Rationale: A budget provides a financial plan against which actual
project performance can be measured.
11. A contractor estimates a job will cost $500,000 and wants a 20%
markup based on cost. What selling price should be used?
A. $520,000
B. $550,000
C. $600,000
D. $625,000
Rationale: A 20% markup on $500,000 is $100,000, producing a selling
price of $600,000.
12. Which statement best describes gross margin?
A. Total liabilities divided by assets
B. Net income divided by liabilities
C. Gross profit expressed as a percentage of revenue
D. Current assets minus current liabilities
Rationale: Gross margin measures gross profit relative to revenue and
is commonly expressed as a percentage.
13. A contractor has $300,000 in current assets and $150,000 in
current liabilities. What is the current ratio?
A. 0.5:1
B. 1:1
C. 2:1
D. 3:1
Rationale: Current ratio = current assets ÷ current liabilities =
$300,000 ÷ $150,000 = 2.
14. What does a high current ratio generally indicate?
