Business Law & Licensing - Done Flashcards
1 – The employer should get I-9 forms from employees within how many days of hire?
Three days
2 – Your Comprehensive General Liability insurance protects you from which of the below?
1 – Persons not employed by you 2 – Damage to property other than your company 3 – Injury to employees 4* – Both 1 and 2
3 – Which of the below would pay state tax on income generated?
Corporations
4 – Which of the below would not be included in a contract offer?
Sub-contractors
5 – A company must have how many employees before workers’ compensation is required?
Three
6 – Employers must pay Unemployment Insurance taxes on employees how often?
Quarterly
7 – John Smith, an employee of your firm, is paid on a two week pay period, has worked the following schedule:A) Week 1 – Monday - Friday (8 hours each day) and 4 hours on SaturdayB) Week 2 – Monday - Wednesday (8 hours each day) Thursday worked half a day then went home with 4 hrs sick pay and Friday is a paid holiday. What is John’s gross pay for this pay period if he is making $18.40 per hour?
$1,582.40
8 – Where will John’s wages fall on the company’s income statement?
Direct Cost
9 – If you, an owner, want to be guaranteed that your project will be completed according to the plans, specifications, terms and conditions of the contract. What kind of bond would you need?
Performance Bond
10 – John Smith inherited some money and quit his job. He was able to get his limited contractor license and has decided to build a house for him and his family. His potential cost estimate has exceeded $565,000. At this time he is waiting on his building permit so he can begin construction. Has he proceeded?
Correctly - This is for his personal use and does not require a license
11 – Which of the statements below is correct?
1 – Employees should receive a w-2 before January 31 from their employer2 – Sub-contractors should receive a 1099 before January 31 from the general contractor 3 – Both 1 and 2 are true 4 – None of the above
12 – What is the disadvantage of the cash method accounting versus the accrual method of accounting?
Cash method does not match revenue with expenses incurred
13 – If Federal Unemployment tax wage period ends on Saturday June 30th, when is your tax deposit to the government due?
July 31st
14 – What is the definition of Negotiation?
Diplomatic bargaining
15 – Where are the Material Safety Data Sheets (MSDS) originated from?
Provided by the manufacturer of the chemical
16 – The contract bid documents include:
1 – Invitation to bid 2 – Bid Instructions 3 – Bid forms 4* – All of the above
17 – Commercial General Liability Insurance (CGL) covers:
1 – Bodily injury to non-employees 2 – Damage to property not belonging to business 3 – Personal injury, slander, damage to reputation 4 – All of the above
18 – If you accumulate a tax liability of $100,000 or more, you must make your deposit by:
1 – Next banking day
19 – The maximum OSHA fine is:
$70,000
20 – How can you become more competitive in business?
Improve safety
21 – What is more likely to be included in company or general overhead?
Insurance
22 – What is the best method to accurately estimate costs of labor for a job?
Job cost history
23 – Which of the following is not an advantage of a sole proprietorship?
Unlimited personal liability
24 – One of the main reasons that a construction contract could be voided or terminated is:
– A material breach occurs when a party refuses to perform the contract
25 – Which of the following is considered to be part of company overhead?
1 – Bonds 2 – Accounting fees 3 – Office rent 4* – Both 2 and 3
26 – When an employee is voluntary or involuntarily terminated, when shall their wages be paid in full?
Within 48 hours or next regular payday
27 – LLC corporations are like an S corporation, federal income taxes are paid only on income distributed to members as ordinary income.
TRUE
28 – What is a bond?
A three-party contract between the surety, contractor and owner
29 – How long must OSHA records be kept by an employer?
5 years
30 – Who is responsible for paying the Federal Unemployment Tax?
Tax is paid by employer only at a rate of 6.2 percent on first $7,000 paid to employee
31 – What is the terminology used for money withheld from monthly payments to a general contractor or subcontractor til after completion of a project?
Retainage
32 – The Fair Labor Standards Act (FLSA) applies to employers who have ____or more employees.
1
33 – The Fair Labor Standards Act (FLSA) provides that a federal minimum wage of not less than $ 7.25 per hour be paid. What group of people can this minimum be paid less than the federal minimum?
Minors under the age of 20
34 – Employers are required by law to furnish 2 (two) copies of form W-2 to each employee from which taxes has been withheld from the previous year before:
31-Jan
35 – The income statement is sometimes called the profit-and-loss statement.
TRUE
36 – Liabilities are all debt and obligations owed by the business. Current liabilities are debts that will occur and must be paid within ____year.
1
37 – Long term liabilities are debt obligations that extend beyond ___year.
1
38 – An 11 (eleven) month note due during a fiscal year is called:
– Current liability
39 – Determine the debt ratio if company assets are $100,000 and liabilities are $50,000.
0.5
40 – When a General Contractor contracts with a sub-contractor who does not have workers compensation he:
Is completely responsible for workers compensation
41 – Employers must pay matching funds for Social Security tax withheld from the employee’s check which is 6.2 percent up to $ 106,800 of gross pay. Also the employer must pay Medicare tax at 1.45 percent, what is the gross amount for Medicare tax?
Pay on all gross wages – there is no maximum
42 – The General Contractor pays a brick mason $ 1,500 for work he performed on a building. Since this amount was above the $600.00 allowed by law, the Contractor must give him which form:
Form 1099
43 – As a General Contractor you have a project superintendent that is paid $25.00 per hour and has worked 60 hours in a week. He is covered under the Fair Labor Standards Act (FLSA) as a nonexempt employee. He has worked 30 % on Project A and 50% on Project B. The remainder of his time was spent in the main office. How much of his salary should be applied to direct cost of supervision for Project B?
$875.00
Which of the following would not be a fixed asset?
Stocks and bonds
when choosing a CPA to do your accounting work, which of the below should be considered?
A CPA that uses generally accepted accounting practices
46 – If the contractor does not give the owner a written or verbal warranty, then the owner will be left with this type of warranty.
Implied warranty
47 – The time located on a CPM (Critical Path Method) chart for a specific task to the task is known as:
Float time
48 – The late start time minus the early start time on a CPM (Critical Path Method) chart is called:
Total float
Which of the following best describes working capital?
Current assets minus current liabilities
50 – A sub-contractor working for a general contractor on a state financed project has not been paid and wishes to submit a claim against the contractor’s payment bond. What is the time period for doing this?
120 days after last furnishing labor or materials
51 – Which of the following scheduling methods would be the most easier to read?
Calendar method
52 – Materials on hand that are stored on a construction project would be listed on the balance sheet under which of the below?
Current asset
53 – A contract must be written if it pertains to:
Real estate or land
54 – Which of the below would not show up on a balance sheet?
Revenue
55 – You have an office trailer on a construction project that has been used on multiple projects, which of the below would it be listed on?
Company overhead
56 – An employee is injured covered under workman’s compensation, which of the below injury would amount to the longest 2/3 weekly compensation for the employee?
Loss of an arm
57 – When you have a broken line on a CPM (Critical Path Method) schedule between two tasks, this broken line represents _____time between the two activities.
Slack or float
58 – A company has current assets of $250,000 and current liabilities of $ 180,000. Their fixed assets are $ 1,500,000 and long term debt is $750,000. Their bonding capacity is 10 times their working capital, what is their bonding capacity.
$700,000
59 – What does the letter “i” on a CPM (Critical Path Method) Schedule indicate?
Start of an activity
60 – What does the letter “j” on a CPM (Critical Path Method) Schedule indicate?
End of an activity
61 – The North Carolina Employment Security Law says that all contractors are required to pay unemployment tax if:
1 – Have one or more employees for 20 weeks during a calendar year 2 – Pay $1,500 in wages in any calendar quarter during a calendar year 3* – Both 1 and 2 4 – Neither of the above
62 – What is the normal warranty period for a construction project?
12 months
63 – What would be the total cost of workman’s compensation insurance for a company if the main office salary was at $125,000 at $1.20 per hundred and the field salaries were $250,000 at $8.50 per hundred?
$22,750
64 – How many days do you have to complete legal action in order to enforce a lien?
180 days
65 – On a CPM (Critical Path Method) schedule, what is the definition of “float time”?
Remaining time after a task is completed until the next task begins
66 – A company’s debt ration is .50, which of the below best describes the company’s financial position?
Just hobbling along
67 – What is the most accurate estimating method?
Quantity take-off method
68 – What is the quick ratio of a company with total assets of $ 150,000, liabilities of $ 35,000 and an inventory of equipment of $ 52,000?
2.8
What is a fixed asset?
Property and equipment
70 – What is the percentage withheld for Medicare tax?
1.45
71 – A contract offer made after having modified the original offer is called what?
Counter offer
72 – Who is responsible for day to day activities on a construction project?
Superintendent
73 – A licensed general contractor agrees to pull a permit for an un-licensed contractor to build a project. The licensed contractor agrees to periodically supervise the project. Which of the below is true?
This is illegal and is subject to disciplinary action by the board
74 – When compensating an employee for and injury, which of the loss below would the insurance company be more liable for?
Loss of an arm
75 – At what age would an employer be required to obtain employment certificate to work an employee?
Under 18
76 – A contractor uses the accrual method of accounting. He has a $6,000 billing for May, a $10,000 billing for June. He receives $6,000 in June payments and pays his total bills of $1,000 in May and total bills of $5,000 in June. What is his profit for June?
$5,000
77 – Anne Johnson has a contractor’s license in the name of Anne Johnson Construction, Inc. Which of the below names is she allowed to work under as a general contractor?
Anne Johnson Construction, Inc.
78 – Which of the items below would not show up on an income statement?
Cash
79 – What is the percent withheld for Social Security and Medicare (FICA) taxes?
7.65%
80 – When you involved in a partnership and one partner is responsible for a $30,000 debt, how much of that debt is the other partner responsible for?
All of the debt or $30,000
81 – How can you keep un-expected costs of materials down on a project?
Timely delivery schedule
82 – If a qualifier leaves, which of the following is true?
The license is good for 30 days maximum after qualifier leaves but licensee can re-take the exam to become licensed
83 – How many days do you have to notify the licensing board if your business is changing names?
30 Days
84 – Which of the below is true about a partnership?
Must obtain a federal tax identification number
85 – How many days does a business have to report a new hire?
20 Days
86 – When are Federal Unemployment Taxes (FUTA) due?
the last day of next month following the ending quarter
87 – If your Federal Unemployment Taxes are $ 5,000, when do you figure these taxes?
Quarterly
88 – Once a contractor’s license expires, what is the period of time before the contractor has to repeat the license application?
4 Years
89 – If there is ambiguous language in the contract that can not be clarified, then the interpretation of the contract would go against:
The party who wrote the contract
90 – The ADA (Americans with Disabilities Act) applies to persons who have impairments such as:
Aids
91 – This schedule should show the contractor is prepared to show working capital at anytime?
Cash flow schedule
92 – What is the quick ratio (sometimes referred to the acid test ratio) for the following:
Current assets $ 80,000 Fixed assets $ 112,000 Inventory $ 12,000 Current liabilities $ 30,000 Long term liabilities $ 86,000 Net income $ 57,000 1 – 2.27
93 – When estimating work, lower markup can result in:
Insufficient cushion for excessive costs
94 – A company changing its address should report the address change to the NC Licensing Board in how many days?
30 days
95 – According to the FLSA (Fair Labor Standards Act) which of the below would be classified as a laborer?
An unskilled worker
96 – A General Contractor with a CGL (Commercial General Liability) insurance policy of $ 1,000 and a $ 500 deductible intentionally violates a code. During an inspection, the violation causes the owner $ 1,000 in damages. Which statement below is correct?
The GC is responsible for the $ 1,000
97 – A company has the following financial information, what is the profit for the year?
The below figures are just examples. Assets - $78,000 Current Liabilities $15,000 Inventory $12,000 Long Term Liabilities $ 45,000 Cost of Goods $ 17,000 Income $ 27,000 1 - $ 10,000 Business Law and Project Management 7th Edition Page 14-5 Formula: Income – Cost of Goods = Profit The remaining figures means nothing
98 – All of the following are considered parts of a source document except:
Tax returns
99 – Which of the following is an advantage of a Subchapter S – Corporation form of business?
Avoidance of double taxation
100 – A lump sum contract on a project is $ 200,000. The retainage withheld of this project is 10%. The contract is complete to 90% and has been paid. What is left owed on the project?
$ 35,000 to $ 40,000 90% would be $ 180,000 less $ 18,000 retainage = $ 162,000 paid Total contract is $ 200,000 minus $ 162,000 paid = $ 38,000 owed
101 – What is the best definition of a bid bond?
1 – Guarantees if the contractor is awarded the job, will do work at submitted price
102 – The document that shows the status of your company is:
Balance sheet
103 – If an owner wishes to sign a contract with a contractor that relieves the owner of any and all responsibilities, what type of contract is this?
Lump sum
104 – If the owner is one day late making payment to a contractor and he walks off the job, which of the below is true?
Material breach (contractor has violated a contract condition)
105 – When two partners are financially responsible for $ 30,000, what is true?
Each partner is responsible for $ 30,000
106 – Which of the below is not a key element of a contract?
Negotiations
107 – If your taxes are due on Saturday June 30th, when do you have to pay them?
Monday, July 2nd
108 – What is the main difference between a Bar Graph and a CPM (Critical Path Method) schedule?
CPM shows interaction with other events
109 – How many employees are required before a written emergency action plan is needed?
11
110 - A contractor installs a $1000.00 heat system and deliberately doesn’t install it properly. He has General Liability Insurance coverage with a $500.00 deductible with no riders. Which of the below is true?
– The contractor is liable for the $1000.00
111 – Which of the below is not a part of a Source Document?
Tax return
112 – What percentage of an employee’s pay must be withheld for worker’s compensation insurance?
0
113 – Quarterly tax deposits may be made using Form _____ if the tax liability is less than $2,500.
941
114 – If the contractor wishes to sign a contract with an owner and indemnify the owner against all damages what can the contractor do to indemnify the owner?
Sign a lump sum contract
115 – Which form would you use to obtain all of the federal tax withholding for an employee?
Circular E: Employers Tax Guide
116 – A contractor has a claim under his comprehensive standard general liability policy with a rider floater that has $ 1,000 deductible per occurrence. The contractor’s claim is $ 5,000 injuries to employee, $ 1,000 injury to pedestrians, $ 3,000 damage to contractor equipment and $ 3,000 for loss of project materials purchased by the contractor. What is the insurance company liable for on this claim?
Nothing
117 – The following business type must pay state income tax:
Corporation
118 – When do you file a 940 tax form?
The last day of the month following the ending quarter
119 – Which of the below is mandatory for an employee to provide for an employee that is covered under the Fair Labor Standards Act (FLSA)?
Overtime pay
120 – Federal Unemployment Taxes (FUTA) ended on October 15th, when are these taxes due? FUTA Taxes are filed on form 940.
January 31st
121 – A contractor uses the accrual method of accounting. He has a $6,000 billing for May, a $5,000 billing for June. He receives $3,000 in June payments and pays his total bills of $1,000 in May and total bills of $3,000 in June. What is his profit for June?
$2,000.00
122 – The income statement is sometimes called:
Profit and loss statement
123 – When determining estimating costs framework, where is the group labor activities placed?
Task
124 – When figuring the labor cost equation, which of the below should be figured in?
Extra hours spent on planning and scheduling
125 – What is the penalty for paying FUTA taxes 30 days late?
10%
126 – A company has a pick up truck that will be paid off before year end, which category will this truck fall in?
Current liability
127 – There is a 50% partnership set up as an LLC doing business as (DBA). Which of the below is true?
Need to register business in each county
128 – You needed to purchase special equipment that was only to be used on one project, which of the below would this be coded to?
Direct cost
129 – How many bids are required on public bid jobs?
3
130 – Which of the following is considered to be part of company overhead?
Expenses
131 – What is the profit margin if the net income is $ 10,000.00, the liabilities are $ 5,000.00 and the assets are $ 3,000.00?
Not enough information given to calculate
132 – Where is a general contractor’s license displayed?
Place of business
133 – Which of the below is not a contributing factor for low profit margin?
Accrual method of accounting
134 – What is the best method for determining job labor costs?
– Historical data
135 – According to FLSA (Fair Labor Standards Act) how many vacation days per year are employers required to provide for their employees?
40 hours
136 – What is a major advantage of a sole proprietorship ownership of a company?
Easier to sell
137– When are the annual 940 tax reports due to the government?
By January 31
138– Which of the below would be an annual depreciation method for an item?
Straight line
139 – What is the best information tool to determine labor cost for each task?
Previous jobs
140 – What is a disadvantage of an oral contract versus a written one?
Difficult to prove
141 – A construction project budget tracking is based on:
Cost estimate
142 – Why is it important to fully understand a contract?
– Prevent disputes
143 – A scheduling bar chart shows:
Time line relationship
144 – Which of the following is an advantage of a Sole Proprietorship?
Business owner makes all decisions
145 – What is the current Social Security rate?
6.20%
146 – A cost plus contract is typically used when:
The labor costs are not specified
147 – Which of the below is an example of an indirect cost?
A superintendent’s year end bonus
148 – How long must all records for employment taxes kept?
4 years
1 – If a qualifying party leaves, the licensee must replace the qualifying party within how many days?
90 days
How many days to notify the Licensing Board of any name change in which the licensee is conducting business in the State of North Carolina?
30 days
When do contractors license expire each year?
– December 31st
f one has an intermediate general building contractor license, they can
1 – Contract a job for $750,000 2 – Contract a job for $350,000 3 – Contract a job for $700,000 4 – All of the Above
If you have a change of address, how many days do you have before you are to notify board?
30
When does a contractor have to notify the NC Licensing Board when their qualifier leaves?
– Immediately
The request to withdraw a bid must be made in writing to the public agency prior to award of the contract, but not later than ____hours after the opening of bids.
72
A licensed contractor pulls a permit for and supervises the work for an unlicensed contractor. Which of below is true?
1 – This is illegal and will be disciplined by the board
If a qualifying party leaves, the licensee must replace the qualifying party within how many days?
30 days ***90 days is the correct answer but if 90 days is not an option then 30 days will be the answer.
– Under which of the following conditions is it appropriate for a licensed entity to “loan” its license number to an unlicensed entity?
Under no conditions
What is the penalty for a license certificate violation?
Class 2 Misdemeanor
