AFSB 152 UPDATED PRACTICE
QUESTIONS AND CORRECT ANSWERS
COMPLETE STUDY GUIDE
◉ D. A basic status report shows specific and limited data for a
contract.
Answer: Which one of the following is true regarding types of
contact status reports?
Select one:
A. As comprehensive reports contain cumulative data, analyzing a
series of reports is not necessary.
B. Only the comprehensive report can prove useful in establishing
billing-cost-gross profit relationships.
C. Both basic and comprehensive reports provide a complete
financial profile.
D. A basic status report shows specific and limited data for a
contract.
◉ D. The parent company's domicile.
,Answer: Samuel has been asked to underwrite a contract bond for
an entity operating in the U.S. that has an international parent. He
is only willing to write the bond through a cooperative
underwriting agreement, with indemnity agreements from the
foreign parent and the U.S. entity. Under this arrangement, it is
important that the indemnification be perfected and enforceable
under the laws of
A. The state where the project owner is located.
B. The location of the project.
C. The state where the U.S. entity is located.
D. The parent company's domicile.
◉ A. Government requirements may require a seal on the plans
from a professional engineer or a registered architect, and the
design/build contractor may not have a designer on staff.
Answer: Which one of the following describes a problem a project
owner could encounter when using a design/build contractor?
A. Government requirements may require a seal on the plans from
a professional engineer or a registered architect, and the
design/build contractor may not have a designer on staff.
B. The design/build contractor charges a separate design fee in
addition to the construction overhead and profit, so the overall
project cost may be high.
,C. Increased planning time should be allotted in the project for
communication among design professionals, contractors, and the
project owner.
D. The design/build contractor has no experience with or
knowledge of the costs associated with various construction
techniques and materials.
◉ B. Contractor.
Answer: The party that directly benefits from an enhanced
competitive position in private work because of the surety's
assurance that its capacity to perform has been carefully reviewed
is the
A. Taxpayers.
B. Contractor.
C. Project owner.
D. Architect or engineer.
◉ B. Additional compensation and an extension of time.
Answer: Stanton Construction was the general contractor on a
construction project for Rowe Industries. The project experienced
a delay due to a reorganization at Rowe Industries. Because this
was classified as a compensable delay under the construction
contract, Stanton Construction was entitled to
, A. An extension of time only.
B. Additional compensation and an extension of time.
C. Additional compensation only.
D. Terminate the contract without penalty.
◉ D. Lenders bond
Answer: Which one of the following guarantees completion of a
project if the principal fails to perform, in accordance with the
plans and specifications, in the given time limit and free of liens?
A. Timber contract bond
B. Conventional bond
C. Subdivision bond
D. Lenders bond
◉ A. Its income is not taxed at the corporate level.
Answer: Kim operates a small business out of her home. She
decided to file the company as a Subchapter S corporation. The
primary advantage of a Subchapter S corporation for small
businesses with a limited number of owners is that
A. Its income is not taxed at the corporate level.
B. Its income is taxed at the corporate level.
C. Its income is taxed at both the corporate and individual level.
D. Its income is taxed at a percentage of the corporate level.
QUESTIONS AND CORRECT ANSWERS
COMPLETE STUDY GUIDE
◉ D. A basic status report shows specific and limited data for a
contract.
Answer: Which one of the following is true regarding types of
contact status reports?
Select one:
A. As comprehensive reports contain cumulative data, analyzing a
series of reports is not necessary.
B. Only the comprehensive report can prove useful in establishing
billing-cost-gross profit relationships.
C. Both basic and comprehensive reports provide a complete
financial profile.
D. A basic status report shows specific and limited data for a
contract.
◉ D. The parent company's domicile.
,Answer: Samuel has been asked to underwrite a contract bond for
an entity operating in the U.S. that has an international parent. He
is only willing to write the bond through a cooperative
underwriting agreement, with indemnity agreements from the
foreign parent and the U.S. entity. Under this arrangement, it is
important that the indemnification be perfected and enforceable
under the laws of
A. The state where the project owner is located.
B. The location of the project.
C. The state where the U.S. entity is located.
D. The parent company's domicile.
◉ A. Government requirements may require a seal on the plans
from a professional engineer or a registered architect, and the
design/build contractor may not have a designer on staff.
Answer: Which one of the following describes a problem a project
owner could encounter when using a design/build contractor?
A. Government requirements may require a seal on the plans from
a professional engineer or a registered architect, and the
design/build contractor may not have a designer on staff.
B. The design/build contractor charges a separate design fee in
addition to the construction overhead and profit, so the overall
project cost may be high.
,C. Increased planning time should be allotted in the project for
communication among design professionals, contractors, and the
project owner.
D. The design/build contractor has no experience with or
knowledge of the costs associated with various construction
techniques and materials.
◉ B. Contractor.
Answer: The party that directly benefits from an enhanced
competitive position in private work because of the surety's
assurance that its capacity to perform has been carefully reviewed
is the
A. Taxpayers.
B. Contractor.
C. Project owner.
D. Architect or engineer.
◉ B. Additional compensation and an extension of time.
Answer: Stanton Construction was the general contractor on a
construction project for Rowe Industries. The project experienced
a delay due to a reorganization at Rowe Industries. Because this
was classified as a compensable delay under the construction
contract, Stanton Construction was entitled to
, A. An extension of time only.
B. Additional compensation and an extension of time.
C. Additional compensation only.
D. Terminate the contract without penalty.
◉ D. Lenders bond
Answer: Which one of the following guarantees completion of a
project if the principal fails to perform, in accordance with the
plans and specifications, in the given time limit and free of liens?
A. Timber contract bond
B. Conventional bond
C. Subdivision bond
D. Lenders bond
◉ A. Its income is not taxed at the corporate level.
Answer: Kim operates a small business out of her home. She
decided to file the company as a Subchapter S corporation. The
primary advantage of a Subchapter S corporation for small
businesses with a limited number of owners is that
A. Its income is not taxed at the corporate level.
B. Its income is taxed at the corporate level.
C. Its income is taxed at both the corporate and individual level.
D. Its income is taxed at a percentage of the corporate level.
