FLORIDA BUILDING CONTRACTOR
BUSINESS/FINANCE STUDY EXAM 2
WITH COMPLETE SOLUTIONS
1. Depreciation is taken on which of the company's assets? - ANSWER-Fixed assets
2. Special warranty in construction contracts usually applies to the work of a(n): -
ANSWER-Subcontractor
3. If a contractor decides to increase the contract price, the contractor: - ANSWER-The
owner must agree to a written and signed change order
4. If a subcontractor signs an unconditional waiver and release, this would imply that a: -
ANSWER-Subcontractor cannot ask anything more of the owner
5. Contractor must renew a contractor bond: - ANSWER-30 days before it expires
6. What should a contractor do if after starting a home improvement project the
contractor discovers that the details and specifications do NOT correctly show the
existing construction? - ANSWER-Stop the job and inform the owner or his agent
7. Keeping good accounting records is important for: - ANSWER-Maintaining financial
statements, obtaining financing and effective management
8. Who can claim a lien on a property? - ANSWER-Contractors, laborers, material
suppliers, subs, and professionals (architects, interior designers, landscape architects,
Engineers, etc. )
9. The plans and specifications of a home improvement project usually describe: -
ANSWER-Layout sizes
10. The number of years that an employer must keep records of FUTA and other federal
taxes is: - ANSWER-4 years
11. What is the term for a detailed compilation of the quantity of each elemental work
item? - ANSWER-takeoff
12. Which company is easiest to set up? - ANSWER-Sole proprietorship
13. If a contractor is offering a job that might last 6 months or longer what should the
contractor state when interviewing for the job? - ANSWER-The job is temporary
, 14. Before beginning work, an employer or contractor must inquire whether asbestos is
present in any building constructed prior to: - ANSWER-1978
15. Which basic term(s) of accounting does a contractor need to understand? -
ANSWER-Losses/Gains, cash basis of accounting, net worth
33. What type of lien release is required upon completion of a home improvement
contract and payment? - ANSWER-Unconditional waiver and release
34. If a jobsite is found to have unsafe conditions OSHA has the power to stop work for:
- ANSWER-Unit the working hazard is resolved
35. How many days does a contractor have to report an injury to the insurance
company? - ANSWER-7 days
36. If a homeowner requests that the contractor obtain a payment and performance
bond, the Owner is wanting coverage for: - ANSWER-Materials, labor and supplies
37. Written reports are required to be written by employer in case of which job related
injury? - ANSWER-An injury requiring just first aid
An injury requiring medical attention beyond first aid
If the employee is required to return to work after the injury
16. Important thing to include when advertising for construction work is: - ANSWER-The
contractors license number
17. Which type of specification is most commonly used for public work? - ANSWER-
Open
18. The amount that an employee "clears" or "takes home" is _______ pay. - ANSWER-
Net
19. The best way to determine if a contractor is duly licensed? - ANSWER-Call the
construction industry licensing board
20. A ________ is needed if an owner wants a contractor to start earlier before the
formalities associated with the signing of the contract can be completed. - ANSWER-
Letter of intent
21. On December 1, a company borrowed $100,000 at 12% per year. The interest will
be paid quarterly, with the first payment due on March 1. What should the company
report on its income statement for December? - ANSWER-$1000, $100,000 x .12 x
1/12=$1000
22. Which can't be said about fixed expenses? - ANSWER-Overhead is generally
considered a fixed expense
BUSINESS/FINANCE STUDY EXAM 2
WITH COMPLETE SOLUTIONS
1. Depreciation is taken on which of the company's assets? - ANSWER-Fixed assets
2. Special warranty in construction contracts usually applies to the work of a(n): -
ANSWER-Subcontractor
3. If a contractor decides to increase the contract price, the contractor: - ANSWER-The
owner must agree to a written and signed change order
4. If a subcontractor signs an unconditional waiver and release, this would imply that a: -
ANSWER-Subcontractor cannot ask anything more of the owner
5. Contractor must renew a contractor bond: - ANSWER-30 days before it expires
6. What should a contractor do if after starting a home improvement project the
contractor discovers that the details and specifications do NOT correctly show the
existing construction? - ANSWER-Stop the job and inform the owner or his agent
7. Keeping good accounting records is important for: - ANSWER-Maintaining financial
statements, obtaining financing and effective management
8. Who can claim a lien on a property? - ANSWER-Contractors, laborers, material
suppliers, subs, and professionals (architects, interior designers, landscape architects,
Engineers, etc. )
9. The plans and specifications of a home improvement project usually describe: -
ANSWER-Layout sizes
10. The number of years that an employer must keep records of FUTA and other federal
taxes is: - ANSWER-4 years
11. What is the term for a detailed compilation of the quantity of each elemental work
item? - ANSWER-takeoff
12. Which company is easiest to set up? - ANSWER-Sole proprietorship
13. If a contractor is offering a job that might last 6 months or longer what should the
contractor state when interviewing for the job? - ANSWER-The job is temporary
, 14. Before beginning work, an employer or contractor must inquire whether asbestos is
present in any building constructed prior to: - ANSWER-1978
15. Which basic term(s) of accounting does a contractor need to understand? -
ANSWER-Losses/Gains, cash basis of accounting, net worth
33. What type of lien release is required upon completion of a home improvement
contract and payment? - ANSWER-Unconditional waiver and release
34. If a jobsite is found to have unsafe conditions OSHA has the power to stop work for:
- ANSWER-Unit the working hazard is resolved
35. How many days does a contractor have to report an injury to the insurance
company? - ANSWER-7 days
36. If a homeowner requests that the contractor obtain a payment and performance
bond, the Owner is wanting coverage for: - ANSWER-Materials, labor and supplies
37. Written reports are required to be written by employer in case of which job related
injury? - ANSWER-An injury requiring just first aid
An injury requiring medical attention beyond first aid
If the employee is required to return to work after the injury
16. Important thing to include when advertising for construction work is: - ANSWER-The
contractors license number
17. Which type of specification is most commonly used for public work? - ANSWER-
Open
18. The amount that an employee "clears" or "takes home" is _______ pay. - ANSWER-
Net
19. The best way to determine if a contractor is duly licensed? - ANSWER-Call the
construction industry licensing board
20. A ________ is needed if an owner wants a contractor to start earlier before the
formalities associated with the signing of the contract can be completed. - ANSWER-
Letter of intent
21. On December 1, a company borrowed $100,000 at 12% per year. The interest will
be paid quarterly, with the first payment due on March 1. What should the company
report on its income statement for December? - ANSWER-$1000, $100,000 x .12 x
1/12=$1000
22. Which can't be said about fixed expenses? - ANSWER-Overhead is generally
considered a fixed expense
