ARE 5.0 PRACTICE MANAGEMENT PRACTICE EXAM QUESTIONS WITH CORRECT DETAILED ANSWERS | ALREADY GRADED A+RECENT VERSION

ARE 5.0 PRACTICE MANAGEMENT PRACTICE EXAM QUESTIONS WITH CORRECT DETAILED ANSWERS | ALREADY GRADED A+RECENT VERSION 1) Sole Proprietorship - ANSWER The business is owned by an individual 2) General Partnership - ANSWER Two or more people (general partners) share in the management, profits and risk of the business 3) Limited Partnership - ANSWER Has at least one general partner (invests in the business, manages it and are financially responsible for it) and at least one limited partner (investor who receives a portion of the profits but has no say in the management of the company) 4) C Corporation - ANSWER An association of individuals (stockholders, directors and officers) that exists as a legal entity apart from its members 5) Stockholders - ANSWER Owners of the corporation in proportion to the number of shares they own 6) Directors - ANSWER Have the fiduciary duty to act in the best interest of the stockholders and are responsible for broad policy decisions 7) Officers - ANSWER Carry out the day-to-day management of the corporation 8) S Corporation - ANSWER A corporation that chooses to allocate it's income and losses directly to shareholders in proportion to their holdings. Limited to small business corporations with less than 100 shareholders. 9) Professional Corporation - ANSWER Similar to other corporations except that liability for malpractice is limited to the person responsible for the act. 10) Limited Liability Company (LLC) - ANSWER Business structure that combines the advantages of a partnership or sole proprietorship with the limited liability of a corporation. (Aka LLP Limited Liability Partnership) 11) Joint Venture - ANSWER A temporary association of two or more persons or firms for the purpose of completing a specific project or achieving a specific goal 12) Teaming Agreement - ANSWER Defines the roles, responsibilities and contractual relationships that will be established if the firms are awarded the project and the joint venture is formed. (Aka Memorandum of Understanding) 13) Memorandum of Understanding - ANSWER Defines the roles, responsibilities and contractual relationships that will be established if the firms are awarded the project and the joint venture is formed (Aka Teaming Agreement) 14) Standard of Care - ANSWER The level of skill and diligence that a reasonably prudent architect would exercise in the same community, in the same time frame, and given the same or similar facts and circumstances 15) Departmental Organization - ANSWER Staff is organized into departments, each of which specializes in a different function. A project moves from one department to another in its route from start to finish (Horizontal Organization or Flat Organization) 16) Studio Organization - ANSWER Staff is organized in groups called studios. Each studio is responsible for completing an entire project (Vertical Organization or Tall Organization) 17) Outsourcing - ANSWER Contracting with another company to do some of the work needed for a project 18) Support Staff - ANSWER Employees other than the professional staff and senior management 19) Business License - ANSWER Allows the business to practice and usually serves as a basis for taxation 20) Certificate of Authorization (COA) - ANSWER Some states require a firm to obtain this in order to offer services to the public 21) Human Resources Management - ANSWER Involves the entire range of hiring, compensating, managing and terminating employees, along with the legal responsibilities of having employees (personnel management) 22) Formal Employee Contract - ANSWER Spells out the employee's responsibilities, work duties and compensation, as well as the firms benefits, work conditions, termination procedures and policies 23) Independent Contractor - ANSWER Person hired for a specific project. They control where and how they perform their work and provide their own supplies and equipment 24) Job Description - ANSWER Defines the duties and responsibilities of the person holding a specific job title 25) Personnel Policy Manuel - ANSWER A positive statement of the firms commitment to employees, clients and the public at large 26) Compensation - ANSWER Any kind of payment made to employees for work - a base salary + benefits 27) Flexible Benefit Package - ANSWER Required statuary benefits are provided, and employees can choose their additional benefits from a menu of options 28) Performance Evaluation - ANSWER A formal review performed by a manager to assess each employees performance 29) National Labor Relations Act - ANSWER Allows private sector employees to organize into trade unions and protects union employees from unfair labor practices (Wagner Act) 30) Equal Pay Act - ANSWER Requires equal pay for employees with the same work duties, responsibilities and experience 31) Employee Eligibility Verification - ANSWER Requires employers to verify the employee's right to work in the United States 32) Wages and Fair Labor Standards Act (FLSA) - ANSWER Establishes min wage, overtime, record keeping and child labor standards in both the private sector and in the government employment 33) Occupational Safety and Health Act of 1970 (OSHA) - ANSWER Requires employers to provide a safe work environment 34) Health Insurance Portability and Accountability Act of 1996 (HIPPA) - ANSWER Protects the privacy of health information 35) Employee Retirement Income Security Act (ERISA) - ANSWER Sets min standards for pension plans in the private sector for employers who have a pension plan program 36) Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA) - ANSWER Requires employers with 20 or more employees to continue group medical coverage if employment is terminated, hours are reduced, employment is changed, or in the event of death, divorce or other significant life events 37) Civil Rights Act of 1991 - ANSWER Prohibits discrimination on the basis of sex, race, color, religion or national origin 38) Age Discrimination in Employment Act of 1967 (ADEA) - ANSWER Prohibits age discrimination in employment for persons age 40 or over 39) Family and Medical Leave Act (FMLA) - ANSWER Requires that companies give an employee up to 12 weeks of unpaid leave for child, spousal, or parental care 40) General Ledger Accounting - ANSWER Keeping track of money flowing into and out of the business and is needed for day-to-day operations, banking, taxes and auditing 41) Project Cost Accounting - ANSWER Tracks revenue, expenses and profit by individual projects 42) Accounts Payable - ANSWER Amounts owed to the suppliers of goods or services that have not been paid 43) Accounts Receivable - ANSWER Money that others owe to the business through invoices for services 44) Assets - ANSWER Any type of tangible or intangible resource that can be measured in monetary terms, including current, fixed and other assets 45) Chart of Accounts - ANSWER A list of the various accounts a business uses to keep track of money, along with corresponding account numbers used for data processing 46) Current Assets - ANSWER Resources of a business that are converted into cash within one year 47) Direct Labor - ANSWER All labor of technical staff, principals and support staff that is directly chargeable to projects 48) Direct Personnel Expense - ANSWER The expense of employee salaries plus the cost of mandatory and discretionary expenses and benefits such as payroll taxes and health insurance 49) Discretionary Distribution - ANSWER Voluntary distribution of profits to owners and nonowners, such as performance bonuses, profit sharing and incentive compensation 50) Fixed Assets - ANSWER Resources that the firm uses and retains for a long period of time, such as equipment and property 51) Gross Revenue - ANSWER All the revenue generated by a business during a stated period of time 52) Indirect Labor - ANSWER All labor not charged to a specific project or revenue-producing account such as administration, general office time and marketing 53) Liabilities - ANSWER Claims by people outside the business and claims by the owners of the business against the total assets of the business 54) Net Operating Revenue (Net Revenue) - ANSWER The money that remains from billing after deducting fees and expenses, reimbursable expenses and non-reimbursable project-related expenses 55) Other Assets - ANSWER Misc resources such as securities and copyrights 56) Overhead - ANSWER Expenses incurred to keep a business operating whether or not any revenue is being generated, such as rent, software leases and fees for power and phone 57) Cash Accounting - ANSWER Revenue and expenses are recognized at the time the business receives the cash or pays a bill