FLORIDA CERTIFIED GENERAL CONTRACTOR –
BUSINESS & FINANCE PRACTICE EXAM
QUESTIONS AND CORRECT ANSWERS
(VERIFIED ANSWERS) PLUS RATIONALES 2025
Q&A | INSTANT DOWNLOAD PDF
1. What is the primary purpose of a balance sheet?
a) To report revenues and expenses
b) To show cash inflows and outflows
c) To present the financial position of a company at a given time
d) To determine the tax liability
A balance sheet provides a snapshot of a company's assets, liabilities, and
equity at a specific point in time.
2. Which document is used to determine if a subcontractor has workers'
compensation insurance?
a) Tax form 1099
b) Certificate of insurance
c) IRS W-4
d) Payroll journal
A certificate of insurance verifies coverage, including workers'
compensation.
, 3. In Florida, how often must a certified general contractor renew their
license?
a) Annually
b) Every two years
c) Every five years
d) Every three years
Florida contractor licenses must be renewed every two years.
4. Which IRS form must be filed quarterly to report employee federal tax
withholdings?
a) W-2
b) W-9
c) 941
d) 1040
Form 941 is used to report income taxes, Social Security, and Medicare
taxes withheld.
5. What is the main advantage of a corporation over a sole
proprietorship?
a) Lower taxes
b) Easier to manage
c) Limited liability
d) Less paperwork
Corporations provide limited liability, protecting personal assets.
6. Which accounting method records income when it is earned and
expenses when they are incurred?
a) Cash basis
b) Accrual basis
, c) Modified basis
d) Real-time accounting
The accrual basis of accounting matches income and expenses to the
period in which they occur.
7. What is depreciation?
a) Increase in asset value
b) Allocation of an asset’s cost over its useful life
c) Inventory loss
d) Tax refund
Depreciation spreads out the cost of a tangible asset over its expected
useful life.
8. What type of business entity combines limited liability with pass-
through taxation?
a) Corporation
b) Limited Liability Company (LLC)
c) Sole proprietorship
d) Nonprofit
An LLC limits owner liability and allows income to pass through to owners'
personal tax returns.
9. Who enforces the Florida Construction Industry Licensing Board (CILB)
rules?
a) Department of Labor
b) Department of Business and Professional Regulation (DBPR)
c) Department of Revenue
d) Occupational Safety and Health Administration (OSHA)
The DBPR oversees the licensing and regulation of Florida contractors.
BUSINESS & FINANCE PRACTICE EXAM
QUESTIONS AND CORRECT ANSWERS
(VERIFIED ANSWERS) PLUS RATIONALES 2025
Q&A | INSTANT DOWNLOAD PDF
1. What is the primary purpose of a balance sheet?
a) To report revenues and expenses
b) To show cash inflows and outflows
c) To present the financial position of a company at a given time
d) To determine the tax liability
A balance sheet provides a snapshot of a company's assets, liabilities, and
equity at a specific point in time.
2. Which document is used to determine if a subcontractor has workers'
compensation insurance?
a) Tax form 1099
b) Certificate of insurance
c) IRS W-4
d) Payroll journal
A certificate of insurance verifies coverage, including workers'
compensation.
, 3. In Florida, how often must a certified general contractor renew their
license?
a) Annually
b) Every two years
c) Every five years
d) Every three years
Florida contractor licenses must be renewed every two years.
4. Which IRS form must be filed quarterly to report employee federal tax
withholdings?
a) W-2
b) W-9
c) 941
d) 1040
Form 941 is used to report income taxes, Social Security, and Medicare
taxes withheld.
5. What is the main advantage of a corporation over a sole
proprietorship?
a) Lower taxes
b) Easier to manage
c) Limited liability
d) Less paperwork
Corporations provide limited liability, protecting personal assets.
6. Which accounting method records income when it is earned and
expenses when they are incurred?
a) Cash basis
b) Accrual basis
, c) Modified basis
d) Real-time accounting
The accrual basis of accounting matches income and expenses to the
period in which they occur.
7. What is depreciation?
a) Increase in asset value
b) Allocation of an asset’s cost over its useful life
c) Inventory loss
d) Tax refund
Depreciation spreads out the cost of a tangible asset over its expected
useful life.
8. What type of business entity combines limited liability with pass-
through taxation?
a) Corporation
b) Limited Liability Company (LLC)
c) Sole proprietorship
d) Nonprofit
An LLC limits owner liability and allows income to pass through to owners'
personal tax returns.
9. Who enforces the Florida Construction Industry Licensing Board (CILB)
rules?
a) Department of Labor
b) Department of Business and Professional Regulation (DBPR)
c) Department of Revenue
d) Occupational Safety and Health Administration (OSHA)
The DBPR oversees the licensing and regulation of Florida contractors.
