AFSB 152 PRACTICE EXAM
FREQUENTLY TESTED ACTUAL QUESTIONS WITH
CORRECT ANSWERS
Question 1.
Indemnity bond
ANSWER
Bond requiring reimbursement for actual loss.
Question 2.
Little Miller Acts
ANSWER
State laws similar to the Miller Act for state/local public projects.
Question 3.
Reformation
ANSWER
Legal action correcting a mistake and altering a bid or agreement.
Question 4.
Maintenance clause
ANSWER
Warranty clause requiring correction of defective work.
Question 5.
Net case loss reserve
ANSWER
Gross reserve reduced by collectible contract balance and possibly collateral.
, Question 6.
Cost-plus contract
ANSWER
Contract paying the contractor the cost of work plus overhead and profit.
Question 7.
Forfeiture bond
ANSWER
Bond requiring payment of the bond penalty upon default.
Question 8.
Interim financial statement
ANSWER
Quarterly or semiannual financial report within the fiscal year.
Question 9.
Subrogation
ANSWER
Surety's right to step into the rights of the party it paid or performed for.
Question 10.
Variable costs
ANSWER
Costs that change when output quantity changes.
Question 11.
Unit-price contract
ANSWER
Contract dividing work into units, with a set price per unit.
FREQUENTLY TESTED ACTUAL QUESTIONS WITH
CORRECT ANSWERS
Question 1.
Indemnity bond
ANSWER
Bond requiring reimbursement for actual loss.
Question 2.
Little Miller Acts
ANSWER
State laws similar to the Miller Act for state/local public projects.
Question 3.
Reformation
ANSWER
Legal action correcting a mistake and altering a bid or agreement.
Question 4.
Maintenance clause
ANSWER
Warranty clause requiring correction of defective work.
Question 5.
Net case loss reserve
ANSWER
Gross reserve reduced by collectible contract balance and possibly collateral.
, Question 6.
Cost-plus contract
ANSWER
Contract paying the contractor the cost of work plus overhead and profit.
Question 7.
Forfeiture bond
ANSWER
Bond requiring payment of the bond penalty upon default.
Question 8.
Interim financial statement
ANSWER
Quarterly or semiannual financial report within the fiscal year.
Question 9.
Subrogation
ANSWER
Surety's right to step into the rights of the party it paid or performed for.
Question 10.
Variable costs
ANSWER
Costs that change when output quantity changes.
Question 11.
Unit-price contract
ANSWER
Contract dividing work into units, with a set price per unit.
