ARE 5.0 / PRACTICE MANAGEMENT /
SECTION 2 Questions with
Guaranteed Pass Solutions 2025-2026
Updated.
scope creep - Answer occurs when project scope unintentionally increases due to changes
made to materials, quality, extent of work, etc
additional services - Answer professional services that may, if authorized / confirmed in
writing by client, be rendered for additional compensation; in addition to services identified in
owner-architect agreement
efficiency-based firm - Answer 1 of 3 common business models: large proportion of lower
level staff compared to more experienced staff; seeks to produce relatively simple and repetitive
projects quickly and on tight budgets
experience - based firm - Answer 1 of 3 common business models: proportionate number of
staff members at all levels; high variety of project types and are able to complete projects of
high complexity
expertise - based firm - Answer 1 of 3 common business models: relies on the knowledge of
one or a few highly skilled architects to produce their work; specialized work that needs unique
perspective
business plan - Answer document that firms create to guide their decision-making process;
broken into
1) purpose
2) finance
3) operations
4) marketing
continually referred to + updated
net revenue per employee - Answer Net Operating Revenue (NOR) / # of employees = NR
per employee
schedule of services - Answer outlines consultants services and fees, line items for each
associated cost
, percentage of construction cost (fee structure) - Answer architect's fee based on how much
it costs to build the project; arch gets paid more if cost of project is inflated
time-charge - Answer fee structure where architect charges a set fee for each hour worked
on the project; simplest fee structure & does not require any calculations by architect, other
than knowing members' billing rates
not-to-exceed price - Answer method of applying max price that an architects fee will be,
used in conjunction with the time-charge fee structure; comfort to clients that there is a cap
cost per unit - Answer fee structure where architect charges based on number of things that
they design; could be based on SF or # of units, etc
prime agreement - Answer architect's agreement with the owner for the project; AIA B101
invoice - Answer a bill issued from business to client for services rendered
asset - Answer matter of accounting; any resource that has economic value to a person or a
business; ex: vehicle, property, equipment, etc
profit plan - Answer comprehensive measures taken by a business to build presumption of
profit into their operations; affects staffing, project schedules, fees, etc
cash flow - Answer money that a business takes in or pays out for services rendered and
expenses incurred
equity (finance) - Answer value of shares held in a company, which represent an ownership
interest
indirect expenses - Answer general and administrative operating expense; not attributed to
specific projects
direct labor - Answer measured in hours or dollars; represents time spent, or the resultant
cost of, work on client's projects; has been or will be invoiced to the client
total labor - Answer cost of your employee's salaries; sum of direct and indirect labor
indirect labor - Answer work spent on non-billable tasks; either by employee or firm as a
whole; ex: marketing, RFPs, overhead work
SECTION 2 Questions with
Guaranteed Pass Solutions 2025-2026
Updated.
scope creep - Answer occurs when project scope unintentionally increases due to changes
made to materials, quality, extent of work, etc
additional services - Answer professional services that may, if authorized / confirmed in
writing by client, be rendered for additional compensation; in addition to services identified in
owner-architect agreement
efficiency-based firm - Answer 1 of 3 common business models: large proportion of lower
level staff compared to more experienced staff; seeks to produce relatively simple and repetitive
projects quickly and on tight budgets
experience - based firm - Answer 1 of 3 common business models: proportionate number of
staff members at all levels; high variety of project types and are able to complete projects of
high complexity
expertise - based firm - Answer 1 of 3 common business models: relies on the knowledge of
one or a few highly skilled architects to produce their work; specialized work that needs unique
perspective
business plan - Answer document that firms create to guide their decision-making process;
broken into
1) purpose
2) finance
3) operations
4) marketing
continually referred to + updated
net revenue per employee - Answer Net Operating Revenue (NOR) / # of employees = NR
per employee
schedule of services - Answer outlines consultants services and fees, line items for each
associated cost
, percentage of construction cost (fee structure) - Answer architect's fee based on how much
it costs to build the project; arch gets paid more if cost of project is inflated
time-charge - Answer fee structure where architect charges a set fee for each hour worked
on the project; simplest fee structure & does not require any calculations by architect, other
than knowing members' billing rates
not-to-exceed price - Answer method of applying max price that an architects fee will be,
used in conjunction with the time-charge fee structure; comfort to clients that there is a cap
cost per unit - Answer fee structure where architect charges based on number of things that
they design; could be based on SF or # of units, etc
prime agreement - Answer architect's agreement with the owner for the project; AIA B101
invoice - Answer a bill issued from business to client for services rendered
asset - Answer matter of accounting; any resource that has economic value to a person or a
business; ex: vehicle, property, equipment, etc
profit plan - Answer comprehensive measures taken by a business to build presumption of
profit into their operations; affects staffing, project schedules, fees, etc
cash flow - Answer money that a business takes in or pays out for services rendered and
expenses incurred
equity (finance) - Answer value of shares held in a company, which represent an ownership
interest
indirect expenses - Answer general and administrative operating expense; not attributed to
specific projects
direct labor - Answer measured in hours or dollars; represents time spent, or the resultant
cost of, work on client's projects; has been or will be invoiced to the client
total labor - Answer cost of your employee's salaries; sum of direct and indirect labor
indirect labor - Answer work spent on non-billable tasks; either by employee or firm as a
whole; ex: marketing, RFPs, overhead work
