CEM 100 EXAM QUESTIONS AND
ANSWERS
The continuous process of elimination of waste, meeting or exceeding all customer
requirements, focusing on the entire value STREAM, and pursuing perfection in the
execution of a constructed project is called __________. - Answer- lean construction
Concerning financial ratios, this ratio called the __________ is widely considered to be
the most significant SHORT-TERM financial measure and is found by taking short-term
assets and dividing them by short-term liabilities. - Answer- current
The financial statement that presents a summary of ASSETS, LIABILITIES, AND NET
WORTH of a construction company at a PARTICULAR POINT in time is called the
__________. - Answer- balance sheet
Concerning various accounting methods for contractors, the accounting method where
income is actually taken into account in the fiscal period in which it is earned, regardless
of whether payment has actually BEEN RECEIVED and items of expense ARE
ENTERED into the accounts as the expenses are incurred, WHETHER OR NOT THAT
HAVE ACTUALLY BEEN PAID DURING THE REPORTING period is termed the
__________. - Answer- % of completion
The procedure on a project where a SINGLE insurance company provides all of the
workers' compensation and employer's liability, general liability, and builder's risk
insurance for the entire project is referred to as __________. - Answer- wrap up
insurance
__________ insurance, is the term for a type of insurance policy that is purchased for
nearly every BUILDING construction project. __________ PROVIDES COVERAGE
AGAINST LOSS OF OR DAMAGE TO THE BUILDING throughout the time of its
construction, up until the time of acceptance from the contractor at the time of
completion of the contract. - Answer- builder's risk
Concerning workers compensation insurance, the employer typically has __________
regardless of the FAULT OF THE INJURED employee w/ FEW EXCEPTIONS. -
Answer- strict liability
Insurance known as __________ insurance protects contractors against third-party
liability claims arising from its own operations, from the operations of independent
, contractors, from completed operations, as well as CONTRACTUAL LIABILITY,
personal injury, and certain other named hazards. - Answer- contingent liability
With a builder's risk insurance policy in effect on a construction project, the owner of the
insured project then sustains a loss to this property caused by one of the subcontractors
on the project. The insurance company then pays the owner for the SUFFERED LOSS,
up to the face amount of the policy. However, now the insurance company by the terms
of the __________ has the right to recover from the subcontractor whose negligence
was the CAUSE OF THE LOSS. - Answer- subrogation clause
Concerning a construction contract dispute where there is a CONFLICT BETWEEN
DRAWING & SPECIFICATION & interpretations hierarchy is not spelled out anywhere
else in the contract documents, from construction industry past practice, the governing
doc. would be the ___. - Answer- specifications
___ are used as a penalty for LATE COMPLETION & is used in LIEU of a determination
of actual DAMAGES suffered by the owner. - Answer- liquidated damages
In order to have a VALID CONTRACT, IT MUST HAVE ALL of the following essential
elements except ___.
-THESE ARE ALL - Answer- - offer & acceptance of the offer (effectively agreement)
- the contract must not be contrary to the public policy
- a price paid (not necessarily money)
- there must be genuineness, proper understanding & consent of what is involved by the
parties to the terms of the contract
In construction contracts, the typical WARRANTY PERIOD is ___. - Answer- 1 year
In the enforcement of construction contracts, ___ or more technically referred to as the
equitable remedy of ___ is in SPECIAL circumstances where by the court may order the
CONTRACT-BREAKER to carry out his contractual promises PRECISELY. An example
of ___ is a home builder who had a house under contract w/ 1 buyer to sell @ 1 price
upon completion but then the market took off (LV Hot Real Estate Market Ex 03-05) &
then tried to back out of the sale. The court in this case who compel ___. - Answer-
specific performance
Concerning project documentation, GOOD DOCUMENTATION must be all of these
except:
- complete
- objective
- credible
- accurate
- uniform - Answer- untimely
The ___ clause in a construction contract refers to some physical aspect of the project
that is materially DIFFERENT from that indicated by the contract documents, or that is
ANSWERS
The continuous process of elimination of waste, meeting or exceeding all customer
requirements, focusing on the entire value STREAM, and pursuing perfection in the
execution of a constructed project is called __________. - Answer- lean construction
Concerning financial ratios, this ratio called the __________ is widely considered to be
the most significant SHORT-TERM financial measure and is found by taking short-term
assets and dividing them by short-term liabilities. - Answer- current
The financial statement that presents a summary of ASSETS, LIABILITIES, AND NET
WORTH of a construction company at a PARTICULAR POINT in time is called the
__________. - Answer- balance sheet
Concerning various accounting methods for contractors, the accounting method where
income is actually taken into account in the fiscal period in which it is earned, regardless
of whether payment has actually BEEN RECEIVED and items of expense ARE
ENTERED into the accounts as the expenses are incurred, WHETHER OR NOT THAT
HAVE ACTUALLY BEEN PAID DURING THE REPORTING period is termed the
__________. - Answer- % of completion
The procedure on a project where a SINGLE insurance company provides all of the
workers' compensation and employer's liability, general liability, and builder's risk
insurance for the entire project is referred to as __________. - Answer- wrap up
insurance
__________ insurance, is the term for a type of insurance policy that is purchased for
nearly every BUILDING construction project. __________ PROVIDES COVERAGE
AGAINST LOSS OF OR DAMAGE TO THE BUILDING throughout the time of its
construction, up until the time of acceptance from the contractor at the time of
completion of the contract. - Answer- builder's risk
Concerning workers compensation insurance, the employer typically has __________
regardless of the FAULT OF THE INJURED employee w/ FEW EXCEPTIONS. -
Answer- strict liability
Insurance known as __________ insurance protects contractors against third-party
liability claims arising from its own operations, from the operations of independent
, contractors, from completed operations, as well as CONTRACTUAL LIABILITY,
personal injury, and certain other named hazards. - Answer- contingent liability
With a builder's risk insurance policy in effect on a construction project, the owner of the
insured project then sustains a loss to this property caused by one of the subcontractors
on the project. The insurance company then pays the owner for the SUFFERED LOSS,
up to the face amount of the policy. However, now the insurance company by the terms
of the __________ has the right to recover from the subcontractor whose negligence
was the CAUSE OF THE LOSS. - Answer- subrogation clause
Concerning a construction contract dispute where there is a CONFLICT BETWEEN
DRAWING & SPECIFICATION & interpretations hierarchy is not spelled out anywhere
else in the contract documents, from construction industry past practice, the governing
doc. would be the ___. - Answer- specifications
___ are used as a penalty for LATE COMPLETION & is used in LIEU of a determination
of actual DAMAGES suffered by the owner. - Answer- liquidated damages
In order to have a VALID CONTRACT, IT MUST HAVE ALL of the following essential
elements except ___.
-THESE ARE ALL - Answer- - offer & acceptance of the offer (effectively agreement)
- the contract must not be contrary to the public policy
- a price paid (not necessarily money)
- there must be genuineness, proper understanding & consent of what is involved by the
parties to the terms of the contract
In construction contracts, the typical WARRANTY PERIOD is ___. - Answer- 1 year
In the enforcement of construction contracts, ___ or more technically referred to as the
equitable remedy of ___ is in SPECIAL circumstances where by the court may order the
CONTRACT-BREAKER to carry out his contractual promises PRECISELY. An example
of ___ is a home builder who had a house under contract w/ 1 buyer to sell @ 1 price
upon completion but then the market took off (LV Hot Real Estate Market Ex 03-05) &
then tried to back out of the sale. The court in this case who compel ___. - Answer-
specific performance
Concerning project documentation, GOOD DOCUMENTATION must be all of these
except:
- complete
- objective
- credible
- accurate
- uniform - Answer- untimely
The ___ clause in a construction contract refers to some physical aspect of the project
that is materially DIFFERENT from that indicated by the contract documents, or that is
