AFSB 152 THE INSTITUTES COMPREHENSIVE
EXAM QUESTIONS AND SOLUTIONS
◉ A limited liability company is most similar to a:
- Subchapter S corporation.
- Subchapter C corporation.
- Joint venture.
- General partnership.
Answer: Subchapter S corporation:
- Tax liability is passed through to the individual members similar to
the way tax liability is passed to shareholders in S Corps.
◉ Mediation has become a favored form of dispute resolution.
Which one of the following statements is true regarding mediation?
- Mediation is the most time-consuming form of dispute resolution.
- Mediation encourages parties to make offers and counteroffers.
- Mediation develops a solution which is final and binding.
- Mediation often results in shock verdicts..
Answer: Mediation encourages parties to make offers and
counteroffers.
,◉ Which one of the following is correct regarding the statute of
limitations for filing a lawsuit regarding a claim under the Miller
Act?
- The statute of limitations is one year.
- The statute of limitations is 90 days.
- There is no statute of limitations.
- The statute of limitations is determined by state law..
Answer: The statute of limitations is one year.
◉ Contractor Marshall has been presented with a unit-priced
contract from project owner Grayson Properties. A unit-price
contract is used
- For most construction contracts.
- To provide a sharing agreement.
- To provide a maximum guaranteed price.
- When the quantity of work cannot be determined in advance..
Answer: When the quantity of work cannot be determined in
advance.
◉ Which one of the following is true regarding joint ventures?
- All partners must participate equally in a joint venture.
- All partners are always fully responsible for the entire project.
,- In a silent joint venture, the silent partner has limited
responsibility.
- A limited joint venture can be formed to limit an individual's
participation..
Answer: A limited joint venture can be formed to limit an
individual's participation.
◉ Which one of the following correctly describes those who must
give notice to the prime contractor under the Miller Act?
- Only second-tier claimants are required to give notice to the prime
contractor.
- No one filing a claim under the Miller Act is required to give notice
to the prime contractor.
- Only first-tier claimants are required to give notice to the prime
contractor.
- All claimants are required to give notice to the prime contractor..
Answer: Only second-tier claimants are required to give notice to the
prime contractor.
◉ Ewing General Contracting (EGC) entered a contract to complete a
major renovation for Ralph's Restaurant. Because Ralph's is located
in a tourist town, it was important that the construction work be
completed by May 1. The construction contract included a provision
that stated that if the job was not completed by May 1, EGC would be
, assessed $500 a day for each day of delay in completing the project.
These damages to be paid by EGC are known as
- Direct damages.
- Consequential damages.
- Liquidated damages.
- Actual damages..
Answer: Liquidated damages.
◉ The costliest method of contract dispute resolution is typically
- Contract termination.
- Mediation.
- Arbitration.
- Litigation..
Answer: Litigation.
◉ A proprietor of a sole proprietorship is
- Entitled to all the profits and responsible for a portion of liabilities.
- Entitled to all the profits and is not responsible for any liability.
- Entitled to a portion of the profits and responsible for all liabilities.
- Entitled to all the profits and responsible for all liabilities..
Answer: Entitled to all the profits and responsible for all liabilities.
EXAM QUESTIONS AND SOLUTIONS
◉ A limited liability company is most similar to a:
- Subchapter S corporation.
- Subchapter C corporation.
- Joint venture.
- General partnership.
Answer: Subchapter S corporation:
- Tax liability is passed through to the individual members similar to
the way tax liability is passed to shareholders in S Corps.
◉ Mediation has become a favored form of dispute resolution.
Which one of the following statements is true regarding mediation?
- Mediation is the most time-consuming form of dispute resolution.
- Mediation encourages parties to make offers and counteroffers.
- Mediation develops a solution which is final and binding.
- Mediation often results in shock verdicts..
Answer: Mediation encourages parties to make offers and
counteroffers.
,◉ Which one of the following is correct regarding the statute of
limitations for filing a lawsuit regarding a claim under the Miller
Act?
- The statute of limitations is one year.
- The statute of limitations is 90 days.
- There is no statute of limitations.
- The statute of limitations is determined by state law..
Answer: The statute of limitations is one year.
◉ Contractor Marshall has been presented with a unit-priced
contract from project owner Grayson Properties. A unit-price
contract is used
- For most construction contracts.
- To provide a sharing agreement.
- To provide a maximum guaranteed price.
- When the quantity of work cannot be determined in advance..
Answer: When the quantity of work cannot be determined in
advance.
◉ Which one of the following is true regarding joint ventures?
- All partners must participate equally in a joint venture.
- All partners are always fully responsible for the entire project.
,- In a silent joint venture, the silent partner has limited
responsibility.
- A limited joint venture can be formed to limit an individual's
participation..
Answer: A limited joint venture can be formed to limit an
individual's participation.
◉ Which one of the following correctly describes those who must
give notice to the prime contractor under the Miller Act?
- Only second-tier claimants are required to give notice to the prime
contractor.
- No one filing a claim under the Miller Act is required to give notice
to the prime contractor.
- Only first-tier claimants are required to give notice to the prime
contractor.
- All claimants are required to give notice to the prime contractor..
Answer: Only second-tier claimants are required to give notice to the
prime contractor.
◉ Ewing General Contracting (EGC) entered a contract to complete a
major renovation for Ralph's Restaurant. Because Ralph's is located
in a tourist town, it was important that the construction work be
completed by May 1. The construction contract included a provision
that stated that if the job was not completed by May 1, EGC would be
, assessed $500 a day for each day of delay in completing the project.
These damages to be paid by EGC are known as
- Direct damages.
- Consequential damages.
- Liquidated damages.
- Actual damages..
Answer: Liquidated damages.
◉ The costliest method of contract dispute resolution is typically
- Contract termination.
- Mediation.
- Arbitration.
- Litigation..
Answer: Litigation.
◉ A proprietor of a sole proprietorship is
- Entitled to all the profits and responsible for a portion of liabilities.
- Entitled to all the profits and is not responsible for any liability.
- Entitled to a portion of the profits and responsible for all liabilities.
- Entitled to all the profits and responsible for all liabilities..
Answer: Entitled to all the profits and responsible for all liabilities.
