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Louisiana Contractor's ExamBusiness and Law
EXAM ALL COMPLETE 300 QUESTIONS WITH
DETAILED SOLUTIONS JUST RELEASED THIS
YEAR
Louisiana Contractor's Exam — Business and Law — 300 Practice Questions
Exam Reference: The Business and Law examination is an online, open-book exam based on
the Contractors Guide to Business, Law and Project Management, Louisiana Contractors 12th
Edition. You have 4 hours to complete 50 questions. Candidates must achieve a passing score
of 70%.
SECTION 1: BUSINESS STRUCTURES AND LIABILITY (Questions 1–20)
Question 1
The liability of the owner(s) extends not only to company assets but to personal assets as well in
which type of business structure?
A) Limited Liability Company (LLC)
B) Sole proprietorship
C) Corporation
D) Subchapter S corporation
Answer: B
In a sole proprietorship, there is no legal separation between the business and the owner,
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exposing personal assets to business liability. Corporations and LLCs provide limited liability
protection, shielding personal assets from business debts.
Question 2
Which form of business is considered separate and apart from its owners and continues to exist
upon the death of one of its owners?
A) Sole proprietorship
B) Partnership
C) Joint venture
D) Corporation
Answer: D
A corporation is a separate legal entity from its owners and has perpetual existence beyond the
death of its shareholders.
Question 3
To create a Limited Liability Company in Louisiana, the Articles of Organization must be filed
with which state agency?
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A) Division of Administration
B) Secretary of State
C) Department of Taxation and Revenue
D) Department of Economic Development
Answer: B
The Louisiana Secretary of State is the filing office for Articles of Organization to create an LLC.
Question 4
What benefits does an S corporation have regarding taxation?
A) Tax exemption on all income
B) Prevent double taxation
C) Lower corporate tax rates
D) Tax deferral on all profits
Answer: B
An S corporation allows income to pass through to shareholders' personal tax returns,
preventing double taxation that occurs with C corporations.
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Question 5
What is the debt ratio formula?
A) Assets divided by equity
B) Liabilities divided by assets
C) Assets divided by liabilities
D) Equity divided by liabilities
Answer: B
The debt ratio is calculated as total liabilities divided by total assets, measuring the proportion
of a company's assets financed by debt.
Question 6
Assets divided by liabilities is which financial ratio?
A) Solvency ratio
B) Liquidity ratio
C) Debt ratio
D) Profitability ratio
Answer: B
4
SUCCESS!
Louisiana Contractor's ExamBusiness and Law
EXAM ALL COMPLETE 300 QUESTIONS WITH
DETAILED SOLUTIONS JUST RELEASED THIS
YEAR
Louisiana Contractor's Exam — Business and Law — 300 Practice Questions
Exam Reference: The Business and Law examination is an online, open-book exam based on
the Contractors Guide to Business, Law and Project Management, Louisiana Contractors 12th
Edition. You have 4 hours to complete 50 questions. Candidates must achieve a passing score
of 70%.
SECTION 1: BUSINESS STRUCTURES AND LIABILITY (Questions 1–20)
Question 1
The liability of the owner(s) extends not only to company assets but to personal assets as well in
which type of business structure?
A) Limited Liability Company (LLC)
B) Sole proprietorship
C) Corporation
D) Subchapter S corporation
Answer: B
In a sole proprietorship, there is no legal separation between the business and the owner,
1
SUCCESS!
,Page 2 of 177
exposing personal assets to business liability. Corporations and LLCs provide limited liability
protection, shielding personal assets from business debts.
Question 2
Which form of business is considered separate and apart from its owners and continues to exist
upon the death of one of its owners?
A) Sole proprietorship
B) Partnership
C) Joint venture
D) Corporation
Answer: D
A corporation is a separate legal entity from its owners and has perpetual existence beyond the
death of its shareholders.
Question 3
To create a Limited Liability Company in Louisiana, the Articles of Organization must be filed
with which state agency?
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A) Division of Administration
B) Secretary of State
C) Department of Taxation and Revenue
D) Department of Economic Development
Answer: B
The Louisiana Secretary of State is the filing office for Articles of Organization to create an LLC.
Question 4
What benefits does an S corporation have regarding taxation?
A) Tax exemption on all income
B) Prevent double taxation
C) Lower corporate tax rates
D) Tax deferral on all profits
Answer: B
An S corporation allows income to pass through to shareholders' personal tax returns,
preventing double taxation that occurs with C corporations.
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Question 5
What is the debt ratio formula?
A) Assets divided by equity
B) Liabilities divided by assets
C) Assets divided by liabilities
D) Equity divided by liabilities
Answer: B
The debt ratio is calculated as total liabilities divided by total assets, measuring the proportion
of a company's assets financed by debt.
Question 6
Assets divided by liabilities is which financial ratio?
A) Solvency ratio
B) Liquidity ratio
C) Debt ratio
D) Profitability ratio
Answer: B
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SUCCESS!
