ARE 5.0 Practice Management UPDATED
ACTUAL Exam Questions and VERIFIED
Answers
Sole Proprietorship - CORRECT ANSWER - The business is owned by an individual
General Partnership - CORRECT ANSWER - Two or more people (general partners) share in
the management, profits and risk of the business
Limited Partnership - CORRECT ANSWER - Has at least one general partner (invests in the
business, manages it and are financially responsible for it) and at least one limited partner
(investor who receives a portion of the profits but has no say in the management of the company)
C Corporation - CORRECT ANSWER - An association of individuals (stockholders, directors
and officers) that exists as a legal entity apart from its members
Stockholders - CORRECT ANSWER - Owners of the corporation in proportion to the number
of shares they own
Directors - CORRECT ANSWER - Have the fiduciary duty to act in the best interest of the
stockholders and are responsible for broad policy decisions
Officers - CORRECT ANSWER - Carry out the day-to-day management of the corporation
S Corporation - CORRECT ANSWER - A corporation that chooses to allocate it's income and
losses directly to shareholders in proportion to their holdings. Limited to small business
corporations with less than 100 shareholders.
Professional Corporation - CORRECT ANSWER - Similar to other corporations except that
liability for malpractice is limited to the person responsible for the act.
, Limited Liability Company (LLC) - CORRECT ANSWER - Business structure that combines
the advantages of a partnership or sole proprietorship with the limited liability of a corporation.
(Aka LLP Limited Liability Partnership)
Joint Venture - CORRECT ANSWER - A temporary association of two or more persons or
firms for the purpose of completing a specific project or achieving a specific goal
Teaming Agreement - CORRECT ANSWER - Defines the roles, responsibilities and
contractual relationships that will be established if the firms are awarded the project and the joint
venture is formed. (Aka Memorandum of Understanding)
Memorandum of Understanding - CORRECT ANSWER - Defines the roles, responsibilities
and contractual relationships that will be established if the firms are awarded the project and the
joint venture is formed (Aka Teaming Agreement)
Standard of Care - CORRECT ANSWER - The level of skill and diligence that a reasonably
prudent architect would exercise in the same community, in the same time frame, and given the
same or similar facts and circumstances
Departmental Organization - CORRECT ANSWER - Staff is organized into departments, each
of which specializes in a different function. A project moves from one department to another in
its route from start to finish (Horizontal Organization or Flat Organization)
Studio Organization - CORRECT ANSWER - Staff is organized in groups called studios.
Each studio is responsible for completing an entire project (Vertical Organization or Tall
Organization)
Outsourcing - CORRECT ANSWER - Contracting with another company to do some of the
work needed for a project
Support Staff - CORRECT ANSWER - Employees other than the professional staff and senior
management
ACTUAL Exam Questions and VERIFIED
Answers
Sole Proprietorship - CORRECT ANSWER - The business is owned by an individual
General Partnership - CORRECT ANSWER - Two or more people (general partners) share in
the management, profits and risk of the business
Limited Partnership - CORRECT ANSWER - Has at least one general partner (invests in the
business, manages it and are financially responsible for it) and at least one limited partner
(investor who receives a portion of the profits but has no say in the management of the company)
C Corporation - CORRECT ANSWER - An association of individuals (stockholders, directors
and officers) that exists as a legal entity apart from its members
Stockholders - CORRECT ANSWER - Owners of the corporation in proportion to the number
of shares they own
Directors - CORRECT ANSWER - Have the fiduciary duty to act in the best interest of the
stockholders and are responsible for broad policy decisions
Officers - CORRECT ANSWER - Carry out the day-to-day management of the corporation
S Corporation - CORRECT ANSWER - A corporation that chooses to allocate it's income and
losses directly to shareholders in proportion to their holdings. Limited to small business
corporations with less than 100 shareholders.
Professional Corporation - CORRECT ANSWER - Similar to other corporations except that
liability for malpractice is limited to the person responsible for the act.
, Limited Liability Company (LLC) - CORRECT ANSWER - Business structure that combines
the advantages of a partnership or sole proprietorship with the limited liability of a corporation.
(Aka LLP Limited Liability Partnership)
Joint Venture - CORRECT ANSWER - A temporary association of two or more persons or
firms for the purpose of completing a specific project or achieving a specific goal
Teaming Agreement - CORRECT ANSWER - Defines the roles, responsibilities and
contractual relationships that will be established if the firms are awarded the project and the joint
venture is formed. (Aka Memorandum of Understanding)
Memorandum of Understanding - CORRECT ANSWER - Defines the roles, responsibilities
and contractual relationships that will be established if the firms are awarded the project and the
joint venture is formed (Aka Teaming Agreement)
Standard of Care - CORRECT ANSWER - The level of skill and diligence that a reasonably
prudent architect would exercise in the same community, in the same time frame, and given the
same or similar facts and circumstances
Departmental Organization - CORRECT ANSWER - Staff is organized into departments, each
of which specializes in a different function. A project moves from one department to another in
its route from start to finish (Horizontal Organization or Flat Organization)
Studio Organization - CORRECT ANSWER - Staff is organized in groups called studios.
Each studio is responsible for completing an entire project (Vertical Organization or Tall
Organization)
Outsourcing - CORRECT ANSWER - Contracting with another company to do some of the
work needed for a project
Support Staff - CORRECT ANSWER - Employees other than the professional staff and senior
management
