TENNESSEE BUSINESS AND LAW
CERTIFICATION SCRIPT 2026 QUESTIONS
WITH SOLUTIONS GRADED A+
◍ A "Subchapter S" or an "S Corporation" affords the following benefit or
advantage:
A. Unlimited profits
B. Reduced or minimal Startup costs
C. increased Capital resource availability
D. Avoidance of double taxation.
Answer: D. (2-4)
◍ The contractor's obligations include all of the following except ______
A. Supplying all labor and any subcontractors needed to complete the job
B. completing all work in accordance with plans and specifications
C. thoroughly cleaning the entire premises using a professional flood
restoration quality contractor upon completion of work
D. Procession of all required licenses and obtaining all required permits.
Answer: C. (7-4)
◍ The following are examples of "overhead expenses" except ____
A. Legal Fees
B. Trade Journal Advertising
C. Office rental expenditures
D. Taxes.
Answer: B. (6-7)
◍ A business plan is very important for the following reasons:
A. it is often required by investors and/or loan officers
B. it can at times be used as a planning tool
C. it is sometimes used as a benchmarking tool
, D. all of the above.
Answer: D. (1-3)
◍ Where a general partnership exists, unless previously stated in a partnership
agreement, if one of the partners dies or decides to leave, the partnership is
usually dissolved, and the assets of the partnership must be sold or
distributed to first pay ______ and then the partners.
A. the investors
B. the creditors
C. the distributors
D. other owners.
Answer: B. (2-2)
◍ A contractor must always ______ before signing a document that will
indemnify an owner
A. carefully review his liability insurance policy
B. think about it and sleep on it a few nights
C. purchase a maintenance bond
D. purchase a security bond.
Answer: A. (3-7 & 7-5)
◍ The work on a small commercial contract can be completed in 40 hours with
a two-man crew. If the contractor elects to send a five-man crew to perform
the work at this location, how many days should it take to complete the job?
A. 1
B. 2
C. 2.5
D. 3.
Answer: B. #men*#hrs=#Xhrs#Xhrs/5men= Xhrs or work days
◍ Contract changes made prior to the awarding of the contract are called, ____
A. document errata
B. Official errata
C. Addenda
D. contract modifications.
, Answer: C. (7-8)
◍ A contractor has purchased a crane at a cost of $60,000.00. This
construction equipment has a projected useful life of 10 years. The salvage
value of the crane is 12,000.00. If the straight-line method of depreciation is
used, what will the annual allowable depreciation be?
A. $3,600.00
B. $4,000.00
C. $4,800.00
D. $6,000.00.
Answer: C. (13-13)Initial Asset cost-Salvage cost= depreciation
costdepreciation cost/useful life years= yearly depreciation amount
◍ An EIN may be obtained from the IRS by __________
A. phone or fax
B. online
C. Mail
D. all of the above.
Answer: D. (14-1)
◍ Perform a calculation to determine the quick ratio or Acid Test Ratio for
company with a balance sheet that shows current assets of $96,000.00. The
company has an inventory of $16,000.00 and liabilities totally $37,500.00.
A. 1.24
B. 2.43
C. 2.14
D. 5.81.
Answer: C. (13-8)Current assets-Inventory/Current liabilities=Quick Ratio
◍ _____ is referred to as "the cost of doing business"
A. Company overhead
B. General overhead
C. Business overhead
D. Company overhead.
Answer: D. (6-7)
CERTIFICATION SCRIPT 2026 QUESTIONS
WITH SOLUTIONS GRADED A+
◍ A "Subchapter S" or an "S Corporation" affords the following benefit or
advantage:
A. Unlimited profits
B. Reduced or minimal Startup costs
C. increased Capital resource availability
D. Avoidance of double taxation.
Answer: D. (2-4)
◍ The contractor's obligations include all of the following except ______
A. Supplying all labor and any subcontractors needed to complete the job
B. completing all work in accordance with plans and specifications
C. thoroughly cleaning the entire premises using a professional flood
restoration quality contractor upon completion of work
D. Procession of all required licenses and obtaining all required permits.
Answer: C. (7-4)
◍ The following are examples of "overhead expenses" except ____
A. Legal Fees
B. Trade Journal Advertising
C. Office rental expenditures
D. Taxes.
Answer: B. (6-7)
◍ A business plan is very important for the following reasons:
A. it is often required by investors and/or loan officers
B. it can at times be used as a planning tool
C. it is sometimes used as a benchmarking tool
, D. all of the above.
Answer: D. (1-3)
◍ Where a general partnership exists, unless previously stated in a partnership
agreement, if one of the partners dies or decides to leave, the partnership is
usually dissolved, and the assets of the partnership must be sold or
distributed to first pay ______ and then the partners.
A. the investors
B. the creditors
C. the distributors
D. other owners.
Answer: B. (2-2)
◍ A contractor must always ______ before signing a document that will
indemnify an owner
A. carefully review his liability insurance policy
B. think about it and sleep on it a few nights
C. purchase a maintenance bond
D. purchase a security bond.
Answer: A. (3-7 & 7-5)
◍ The work on a small commercial contract can be completed in 40 hours with
a two-man crew. If the contractor elects to send a five-man crew to perform
the work at this location, how many days should it take to complete the job?
A. 1
B. 2
C. 2.5
D. 3.
Answer: B. #men*#hrs=#Xhrs#Xhrs/5men= Xhrs or work days
◍ Contract changes made prior to the awarding of the contract are called, ____
A. document errata
B. Official errata
C. Addenda
D. contract modifications.
, Answer: C. (7-8)
◍ A contractor has purchased a crane at a cost of $60,000.00. This
construction equipment has a projected useful life of 10 years. The salvage
value of the crane is 12,000.00. If the straight-line method of depreciation is
used, what will the annual allowable depreciation be?
A. $3,600.00
B. $4,000.00
C. $4,800.00
D. $6,000.00.
Answer: C. (13-13)Initial Asset cost-Salvage cost= depreciation
costdepreciation cost/useful life years= yearly depreciation amount
◍ An EIN may be obtained from the IRS by __________
A. phone or fax
B. online
C. Mail
D. all of the above.
Answer: D. (14-1)
◍ Perform a calculation to determine the quick ratio or Acid Test Ratio for
company with a balance sheet that shows current assets of $96,000.00. The
company has an inventory of $16,000.00 and liabilities totally $37,500.00.
A. 1.24
B. 2.43
C. 2.14
D. 5.81.
Answer: C. (13-8)Current assets-Inventory/Current liabilities=Quick Ratio
◍ _____ is referred to as "the cost of doing business"
A. Company overhead
B. General overhead
C. Business overhead
D. Company overhead.
Answer: D. (6-7)
