NASCLA BUSINESS LAW Exam 2026
Questions and Answers
sole proprietor - Correct answer-A form of business ownership is least regulated
partnership - Correct answer-Under which form of business organization are all
investors fully liable for all debts of the business.
S corporation - Correct answer-owner who is looking for maximum protection
from personal liability
leaving something out - Correct answer-worst possible error in estimating
source documents - Correct answer-the paperwork related to purchase order, credit
card receipts and so on...
Income Statement - Correct answer-A financial statement that reports a company's
revenues and expenses and resulting net income or net loss for a specific period of
time.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
,Balance Sheet - Correct answer-a statement of the assets, liabilities, and capital of
a business or other organization at a particular point in time, detailing the balance
of income and expenditure over the preceding period.
Cash Flow Statement - Correct answer-A summary that shows total income and
spending for a given time period
Depreciation - Correct answer-term use for the method of allocating the cost of an
asset over its useful life
168 hours (7 x 24 hours) - Correct answer-number of hours in a define Fair Labor
Standard Acts workweek
State Income Tax - Correct answer-taxes deducted solely from employee's wages
Form W-3, Transmittal of Wage and Tax Statements - Correct answer-A form
completed by the employer to verify the number of W-2s and amounts withheld as
shown on them. This form is sent to the Social Security Administration data
processing center along with copies of each employee's W-2 forms.
FUTA (Federal Unemployment Tax Act) - Correct answer-A payroll or
employment tax paid solely by the employer based on the salary, usually around
.6% to cover the unemployment insurance (UI) and job service programs, pay one-
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
, half of the cost of extended unemployment benefits, and provides for a fund from
which states may borrow
4 years - Correct answer-how long must federal employment tax records must be
kept?
establish a basis for future estimates - Correct answer-one useful outcome of job
cost analysis is to
bonds - Correct answer-which of the following is NOT a company overhead cost?
Project overhead costs - Correct answer-Can be charged to a specific project
Cannot be attributed to labor, materials, or equipment
4-10% the cost of construction
EX bonds, equipment storage, project office, security, permits,
construction loan - Correct answer-which of the following is a project overhead
cost?
allowances - Correct answer-the amount of money you plan to use for a certain
budget category that are not estimated.
Unit Price Contract - Correct answer-A contract in which payment is based on a
contractor's quoted price per unit of work performed and the owner's measurement
©COPYRIGHT 2025, ALL RIGHTS RESERVED 3
Questions and Answers
sole proprietor - Correct answer-A form of business ownership is least regulated
partnership - Correct answer-Under which form of business organization are all
investors fully liable for all debts of the business.
S corporation - Correct answer-owner who is looking for maximum protection
from personal liability
leaving something out - Correct answer-worst possible error in estimating
source documents - Correct answer-the paperwork related to purchase order, credit
card receipts and so on...
Income Statement - Correct answer-A financial statement that reports a company's
revenues and expenses and resulting net income or net loss for a specific period of
time.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
,Balance Sheet - Correct answer-a statement of the assets, liabilities, and capital of
a business or other organization at a particular point in time, detailing the balance
of income and expenditure over the preceding period.
Cash Flow Statement - Correct answer-A summary that shows total income and
spending for a given time period
Depreciation - Correct answer-term use for the method of allocating the cost of an
asset over its useful life
168 hours (7 x 24 hours) - Correct answer-number of hours in a define Fair Labor
Standard Acts workweek
State Income Tax - Correct answer-taxes deducted solely from employee's wages
Form W-3, Transmittal of Wage and Tax Statements - Correct answer-A form
completed by the employer to verify the number of W-2s and amounts withheld as
shown on them. This form is sent to the Social Security Administration data
processing center along with copies of each employee's W-2 forms.
FUTA (Federal Unemployment Tax Act) - Correct answer-A payroll or
employment tax paid solely by the employer based on the salary, usually around
.6% to cover the unemployment insurance (UI) and job service programs, pay one-
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
, half of the cost of extended unemployment benefits, and provides for a fund from
which states may borrow
4 years - Correct answer-how long must federal employment tax records must be
kept?
establish a basis for future estimates - Correct answer-one useful outcome of job
cost analysis is to
bonds - Correct answer-which of the following is NOT a company overhead cost?
Project overhead costs - Correct answer-Can be charged to a specific project
Cannot be attributed to labor, materials, or equipment
4-10% the cost of construction
EX bonds, equipment storage, project office, security, permits,
construction loan - Correct answer-which of the following is a project overhead
cost?
allowances - Correct answer-the amount of money you plan to use for a certain
budget category that are not estimated.
Unit Price Contract - Correct answer-A contract in which payment is based on a
contractor's quoted price per unit of work performed and the owner's measurement
©COPYRIGHT 2025, ALL RIGHTS RESERVED 3
