CM 4211 Exam Study Guide | Questions
Solved 100% Correct | Verified Solutions
underlying economic principle of workers' compensation - ✔✔the costs associated with an
on-the-job injury or death of an employee regardless of fault, is an expense of production
and should be borne by the industry.
four classifications of work injuries - ✔✔1.) Temporary-total
2.) Permanent- partial,
3.) Permanent-total,
4.) Death
rating modifier - ✔✔employer's past loss experience is a determining factor in its
present and future worker's compensation costs.
reasons for proper records to be kept - ✔✔1) The law requires it. (Main reason)
2) Must provide the source material for obtaining indispensable support services (ie
Cost control)
3) Financial statements and reports are required for submittal to bankers, sureties, and owners.
cash method of accounting vs the accrual method of accounting? - ✔✔cash=simple
accural=complex
, long term contract - ✔✔one that is not completed in taxable year
% of completion in accounting - ✔✔recognizes income as work advances
completed method of accounting - ✔✔recognizes project income when contract
is completed
income statement - ✔✔abstract of the nature and amounts of the company's income
and expenses
balance sheet - ✔✔summary of the assets, liabilities, and net worth of a company at
a particular time
book value - ✔✔Book value excludes intangibles of all kinds that would have no value
upon liquidation.
financial ratios - ✔✔1) Liquidity Ratios-Measures reveal a company's ability to meet
its financial obligations.
2) Profitability Ratios-Values relate company profits to various parameters such as contract
volume or total assets.
3) Leverage Ratios-Ratios compare company debt with other financial measures such as
total assets or net worth.
4.) Activity Ratios- indicate the level of investment turnover or how well the company is using
its working capital& assets.
What does the ratio of quick assets to current liabilities show - ✔✔The ratio of quick
assets to current liabilities (quick ratio) shows the number of dollars immediately available to
cover current debt.
Solved 100% Correct | Verified Solutions
underlying economic principle of workers' compensation - ✔✔the costs associated with an
on-the-job injury or death of an employee regardless of fault, is an expense of production
and should be borne by the industry.
four classifications of work injuries - ✔✔1.) Temporary-total
2.) Permanent- partial,
3.) Permanent-total,
4.) Death
rating modifier - ✔✔employer's past loss experience is a determining factor in its
present and future worker's compensation costs.
reasons for proper records to be kept - ✔✔1) The law requires it. (Main reason)
2) Must provide the source material for obtaining indispensable support services (ie
Cost control)
3) Financial statements and reports are required for submittal to bankers, sureties, and owners.
cash method of accounting vs the accrual method of accounting? - ✔✔cash=simple
accural=complex
, long term contract - ✔✔one that is not completed in taxable year
% of completion in accounting - ✔✔recognizes income as work advances
completed method of accounting - ✔✔recognizes project income when contract
is completed
income statement - ✔✔abstract of the nature and amounts of the company's income
and expenses
balance sheet - ✔✔summary of the assets, liabilities, and net worth of a company at
a particular time
book value - ✔✔Book value excludes intangibles of all kinds that would have no value
upon liquidation.
financial ratios - ✔✔1) Liquidity Ratios-Measures reveal a company's ability to meet
its financial obligations.
2) Profitability Ratios-Values relate company profits to various parameters such as contract
volume or total assets.
3) Leverage Ratios-Ratios compare company debt with other financial measures such as
total assets or net worth.
4.) Activity Ratios- indicate the level of investment turnover or how well the company is using
its working capital& assets.
What does the ratio of quick assets to current liabilities show - ✔✔The ratio of quick
assets to current liabilities (quick ratio) shows the number of dollars immediately available to
cover current debt.
