MARYLAND HOME IMPROVEMENT 2026/2027
QUESTIONS AND SOLUTIONS RATED A+
✔✔Change Order Definition - ✔✔Written contract modification
✔✔Change Order Requirement - ✔✔Must be signed
✔✔Unauthorized Changes - ✔✔Prohibited
✔✔Warranty Disclosure - ✔✔Must be in contract
✔✔Material Specifications - ✔✔Must be listed
✔✔Subcontractor Disclosure - ✔✔Recommended in contract
✔✔Lien Rights - ✔✔Must follow state law
✔✔Mechanic's Lien - ✔✔Possible for unpaid work
✔✔False Advertising - ✔✔Prohibited
✔✔Misrepresentation - ✔✔Illegal
✔✔Complaint Filing - ✔✔Through MHIC
✔✔Disciplinary Actions - ✔✔Fines, suspension, revocation
✔✔Guaranty Fund - ✔✔Pays homeowners for losses
✔✔Guaranty Fund Eligibility - ✔✔Requires valid license
✔✔Bond Requirement - ✔✔Protects consumers
✔✔Business Registration - ✔✔Required with state
✔✔Sales Tax Collection - ✔✔Must be collected when applicable
✔✔Record Keeping - ✔✔Required by law
✔✔Financial Records - ✔✔Must be accurate
✔✔Job Cost Records - ✔✔Track expenses
, ✔✔Gross Profit - ✔✔Revenue minus direct costs
✔✔Net Profit - ✔✔Gross profit minus overhead
✔✔Overhead Expenses - ✔✔Rent, insurance, admin
✔✔Markup - ✔✔Addition to cover overhead and profit
✔✔Break-Even Point - ✔✔No profit no loss
✔✔Cash Flow - ✔✔Movement of money
✔✔Accounts Receivable - ✔✔Money owed to business
✔✔Accounts Payable - ✔✔Money business owes
✔✔Budget Planning - ✔✔Controls costs
✔✔Estimating Accuracy - ✔✔Prevents losses
✔✔Material Takeoff - ✔✔Quantity measurement
✔✔Labor Estimate - ✔✔Time required
✔✔Equipment Costs - ✔✔Included in estimate
✔✔Contingency Allowance - ✔✔Extra funds
✔✔Bid Proposal - ✔✔Formal price offer
✔✔Competitive Bidding - ✔✔Multiple bids
✔✔Fixed Price Contract - ✔✔Set amount
✔✔Cost Plus Contract - ✔✔Cost plus fee
✔✔Purchase Order - ✔✔Material authorization
✔✔Invoice - ✔✔Billing document
✔✔Receipt - ✔✔Proof of payment
✔✔Payroll Records - ✔✔Employee wages
QUESTIONS AND SOLUTIONS RATED A+
✔✔Change Order Definition - ✔✔Written contract modification
✔✔Change Order Requirement - ✔✔Must be signed
✔✔Unauthorized Changes - ✔✔Prohibited
✔✔Warranty Disclosure - ✔✔Must be in contract
✔✔Material Specifications - ✔✔Must be listed
✔✔Subcontractor Disclosure - ✔✔Recommended in contract
✔✔Lien Rights - ✔✔Must follow state law
✔✔Mechanic's Lien - ✔✔Possible for unpaid work
✔✔False Advertising - ✔✔Prohibited
✔✔Misrepresentation - ✔✔Illegal
✔✔Complaint Filing - ✔✔Through MHIC
✔✔Disciplinary Actions - ✔✔Fines, suspension, revocation
✔✔Guaranty Fund - ✔✔Pays homeowners for losses
✔✔Guaranty Fund Eligibility - ✔✔Requires valid license
✔✔Bond Requirement - ✔✔Protects consumers
✔✔Business Registration - ✔✔Required with state
✔✔Sales Tax Collection - ✔✔Must be collected when applicable
✔✔Record Keeping - ✔✔Required by law
✔✔Financial Records - ✔✔Must be accurate
✔✔Job Cost Records - ✔✔Track expenses
, ✔✔Gross Profit - ✔✔Revenue minus direct costs
✔✔Net Profit - ✔✔Gross profit minus overhead
✔✔Overhead Expenses - ✔✔Rent, insurance, admin
✔✔Markup - ✔✔Addition to cover overhead and profit
✔✔Break-Even Point - ✔✔No profit no loss
✔✔Cash Flow - ✔✔Movement of money
✔✔Accounts Receivable - ✔✔Money owed to business
✔✔Accounts Payable - ✔✔Money business owes
✔✔Budget Planning - ✔✔Controls costs
✔✔Estimating Accuracy - ✔✔Prevents losses
✔✔Material Takeoff - ✔✔Quantity measurement
✔✔Labor Estimate - ✔✔Time required
✔✔Equipment Costs - ✔✔Included in estimate
✔✔Contingency Allowance - ✔✔Extra funds
✔✔Bid Proposal - ✔✔Formal price offer
✔✔Competitive Bidding - ✔✔Multiple bids
✔✔Fixed Price Contract - ✔✔Set amount
✔✔Cost Plus Contract - ✔✔Cost plus fee
✔✔Purchase Order - ✔✔Material authorization
✔✔Invoice - ✔✔Billing document
✔✔Receipt - ✔✔Proof of payment
✔✔Payroll Records - ✔✔Employee wages
