NASCLA Test 1 Exam Questions and
Verified Detailed Answers| Graded A+
____ and _____ are two essential parts to a business plan - ✔✔1. Planning Tool
2. Loan Document
3. Investor Document
4. Benchmarking Tool
Select two standard components of a business plan - ✔✔1. Marking Strategy
2. Executive Strategy
_____ is the biggest drawback of a sole proprietorship. - ✔✔Unlimited Personal
Liability
If you are a sole proprietor and complete work under a name that is not your
own, you would be required to file a _____ with local or state government. -
✔✔Fictitious Name Certificate
1|Page
©PROFFKERRYMARTIN 2025/2026. YEAR PUBLISHED 2025.
,You ____ be held liable in a Partnership for the dealings/behavior of your
partner if completed on behalf of your company. - ✔✔Can
A crucial drawback of a _____ is double taxation. - ✔✔C Corporation
The person(s) in charge of a corporation is held responsible, to pay out of their
pocket, for the bills still outstanding of that corporation. - ✔✔False
The biggest benefit of creating a ______ is that you avoid double taxation. -
✔✔S Corporation
The benefit of have a _______ is that Federal tax is only filed on earnings
dispersed to its representatives. - ✔✔Limited Liability Corporation
Form _____ is mandatory to be assigned as an S Corporation. - ✔✔Form 2553
Insurance enhances your protection from ______ and theft. - ✔✔Accidents
_____ Insurance will protect you from accidents/loss associated to your
belongings as well as the companies. - ✔✔Property Insurance
________ Insurance will protect the structure being built and the materials at
that location. - ✔✔Builders' Risk
Builders Risk insurance will protect your personal belongings and materials if it
is at the location. - ✔✔False
2|Page
©PROFFKERRYMARTIN 2025/2026. YEAR PUBLISHED 2025.
, A(n) ______ _______ will protect against movable machinery left at the location
or while being transported. - ✔✔Equipment Floater
______ will protect against accidents/damages to visitors or items the company
does not own. - ✔✔Commercial General Liability
The _____ covers the cost on the premium for Workers Compensation. -
✔✔Employer
A ____ bond promises the person building will complete the job for the amount
quoted, will sign the agreement and will provide a ____ and ____ bond. - ✔✔Bid
Performance Payment
A ____ bond promises that the job will be finished within the scope of the
agreement. - ✔✔Payment
The Miller Act calls for _____ and _____ bonds for all Federal projects costing
more than $100,000. - ✔✔Performance Payment
A ____ bond promises to subcontractors and vendors they will be compensated
for their efforts and materials. - ✔✔Payment
A _____ policy groups property and liability into one policy so that only one
premium for both has to be paid. - ✔✔Business Owner
3|Page
©PROFFKERRYMARTIN 2025/2026. YEAR PUBLISHED 2025.
Verified Detailed Answers| Graded A+
____ and _____ are two essential parts to a business plan - ✔✔1. Planning Tool
2. Loan Document
3. Investor Document
4. Benchmarking Tool
Select two standard components of a business plan - ✔✔1. Marking Strategy
2. Executive Strategy
_____ is the biggest drawback of a sole proprietorship. - ✔✔Unlimited Personal
Liability
If you are a sole proprietor and complete work under a name that is not your
own, you would be required to file a _____ with local or state government. -
✔✔Fictitious Name Certificate
1|Page
©PROFFKERRYMARTIN 2025/2026. YEAR PUBLISHED 2025.
,You ____ be held liable in a Partnership for the dealings/behavior of your
partner if completed on behalf of your company. - ✔✔Can
A crucial drawback of a _____ is double taxation. - ✔✔C Corporation
The person(s) in charge of a corporation is held responsible, to pay out of their
pocket, for the bills still outstanding of that corporation. - ✔✔False
The biggest benefit of creating a ______ is that you avoid double taxation. -
✔✔S Corporation
The benefit of have a _______ is that Federal tax is only filed on earnings
dispersed to its representatives. - ✔✔Limited Liability Corporation
Form _____ is mandatory to be assigned as an S Corporation. - ✔✔Form 2553
Insurance enhances your protection from ______ and theft. - ✔✔Accidents
_____ Insurance will protect you from accidents/loss associated to your
belongings as well as the companies. - ✔✔Property Insurance
________ Insurance will protect the structure being built and the materials at
that location. - ✔✔Builders' Risk
Builders Risk insurance will protect your personal belongings and materials if it
is at the location. - ✔✔False
2|Page
©PROFFKERRYMARTIN 2025/2026. YEAR PUBLISHED 2025.
, A(n) ______ _______ will protect against movable machinery left at the location
or while being transported. - ✔✔Equipment Floater
______ will protect against accidents/damages to visitors or items the company
does not own. - ✔✔Commercial General Liability
The _____ covers the cost on the premium for Workers Compensation. -
✔✔Employer
A ____ bond promises the person building will complete the job for the amount
quoted, will sign the agreement and will provide a ____ and ____ bond. - ✔✔Bid
Performance Payment
A ____ bond promises that the job will be finished within the scope of the
agreement. - ✔✔Payment
The Miller Act calls for _____ and _____ bonds for all Federal projects costing
more than $100,000. - ✔✔Performance Payment
A ____ bond promises to subcontractors and vendors they will be compensated
for their efforts and materials. - ✔✔Payment
A _____ policy groups property and liability into one policy so that only one
premium for both has to be paid. - ✔✔Business Owner
3|Page
©PROFFKERRYMARTIN 2025/2026. YEAR PUBLISHED 2025.
