AFSB 152 Exam Questions and Answers
100% Solved | Graded A+
The tender preparation stage of estimating begins after... - ✔✔the architect
and owner solicit bids, when the contractors begin their estimating
processes
To find clarity on payment bond terms, you can... - ✔✔consult the
applicable and relatively stable case law that does define the terms
A surety needs additional information, such as _____________, to
adequately evaluate the work-backlog risk of granting this bond - ✔✔the
contractor's overall capacity and financial capacity
The Schedule of __________ is one of the most important schedules used
by producers and underwriters when analyzing a contractor's financial
statement - ✔✔construction in progress
A potential problem a project owner could encounter when using a
design/build contractor is that 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 (T/F) - ✔✔T
1
©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
,The design/build contractor charges a separate design fee in addition to the
construction overhead and profit (T/F) - ✔✔F
You can recognize a small companies tax method by looking at their
balance sheet (T/F) - ✔✔T
Vast majority of small contractors use one method for both tax reporting
and financial reporting - ✔✔F
Bid bonds may not contain specific penal sums or bond penalties (T/F) -
✔✔T
Through a sharing clause in a construction contract, the ___________ is
responsible for cost overruns, and the _________ are responsible cost
underruns - ✔✔contractor
owner and contractor
An obligation of the principal in a bid bond that is not a manuscript bid bond
form is that it must... - ✔✔furnish performance and payment bonds with an
acceptable surety
Hazardous waste bond underwriters can protect the surety from exposure
to third-party liability outside the protection of the bond penalty by... -
2
©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
,✔✔ensuring that the bond does not require the surety to finance the
principal or to engage a completing contractor
The three tasks that can determine whether the contractor can successfully
perform the work are... - ✔✔estimating, planning, and managing the work
to be performed
So that the underwriter can evaluate the contractor's completed jobs, work
programs, and experience, the principal should provide: - ✔✔Type, size,
and location of work
Largest previous backlog
Profitability
Set-aside programs were developed to... - ✔✔assist minority-owned,
disadvantaged, or women-owned business enterprises
To escape their obligation to indemnify the surety, the principal and
indemnitors must show that... - ✔✔any payments the surety made were in
bad faith
3
©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
, Under a cooperative underwriting arrangement, it is important that the
indemnification be perfected and enforceable under the laws of the... -
✔✔parent company's domicile
_______ is a form used in trend analysis and forecasting that provides a
basis for comparing the as-given and as-allowed amounts related to a
financial statement - ✔✔Financial statement analysis
The responsibility for presenting project plans and specifications from
which bidders can readily determine how the project should be built and its
costs is that of the... - ✔✔owner and the architect
Items that best characterize the types of statements that interest surety
underwriters are... - ✔✔balance sheets
income statements
cash flow statements
supporting notes and schedules for the past three to five years, including
interim statements for the current fiscal year and concurrent statements for
all indemnitors
4
©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
100% Solved | Graded A+
The tender preparation stage of estimating begins after... - ✔✔the architect
and owner solicit bids, when the contractors begin their estimating
processes
To find clarity on payment bond terms, you can... - ✔✔consult the
applicable and relatively stable case law that does define the terms
A surety needs additional information, such as _____________, to
adequately evaluate the work-backlog risk of granting this bond - ✔✔the
contractor's overall capacity and financial capacity
The Schedule of __________ is one of the most important schedules used
by producers and underwriters when analyzing a contractor's financial
statement - ✔✔construction in progress
A potential problem a project owner could encounter when using a
design/build contractor is that 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 (T/F) - ✔✔T
1
©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
,The design/build contractor charges a separate design fee in addition to the
construction overhead and profit (T/F) - ✔✔F
You can recognize a small companies tax method by looking at their
balance sheet (T/F) - ✔✔T
Vast majority of small contractors use one method for both tax reporting
and financial reporting - ✔✔F
Bid bonds may not contain specific penal sums or bond penalties (T/F) -
✔✔T
Through a sharing clause in a construction contract, the ___________ is
responsible for cost overruns, and the _________ are responsible cost
underruns - ✔✔contractor
owner and contractor
An obligation of the principal in a bid bond that is not a manuscript bid bond
form is that it must... - ✔✔furnish performance and payment bonds with an
acceptable surety
Hazardous waste bond underwriters can protect the surety from exposure
to third-party liability outside the protection of the bond penalty by... -
2
©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
,✔✔ensuring that the bond does not require the surety to finance the
principal or to engage a completing contractor
The three tasks that can determine whether the contractor can successfully
perform the work are... - ✔✔estimating, planning, and managing the work
to be performed
So that the underwriter can evaluate the contractor's completed jobs, work
programs, and experience, the principal should provide: - ✔✔Type, size,
and location of work
Largest previous backlog
Profitability
Set-aside programs were developed to... - ✔✔assist minority-owned,
disadvantaged, or women-owned business enterprises
To escape their obligation to indemnify the surety, the principal and
indemnitors must show that... - ✔✔any payments the surety made were in
bad faith
3
©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
, Under a cooperative underwriting arrangement, it is important that the
indemnification be perfected and enforceable under the laws of the... -
✔✔parent company's domicile
_______ is a form used in trend analysis and forecasting that provides a
basis for comparing the as-given and as-allowed amounts related to a
financial statement - ✔✔Financial statement analysis
The responsibility for presenting project plans and specifications from
which bidders can readily determine how the project should be built and its
costs is that of the... - ✔✔owner and the architect
Items that best characterize the types of statements that interest surety
underwriters are... - ✔✔balance sheets
income statements
cash flow statements
supporting notes and schedules for the past three to five years, including
interim statements for the current fiscal year and concurrent statements for
all indemnitors
4
©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
