Practice Test (Business Law - Builder's License)

Question 1

The builder or contractor shall deliver to the customer, when construction is involved:

Associated Answers
1 specifications for the job
2 all necessary permits
3 both plans and specifications
4 fully executed copies of all agreements, including plans and specifications

Answer 1

4 fully executed copies of all agreements, including plans and specifications

Question 2

Whitie Nowak built a house in January. It was sold in February and Renfru Zetz moved in at completion in September of the same year. The following year in December the pipes froze. Who is responsible for the damage?

Associated Answers
1 plumber
2 builder
3 heating contractor
4 homeowner

Answer 2

2 builder
Notes:
The builder is responsible for faulty workmanship for a period of 18 months. Starting from the date of purchase, completion or occupancy which ever occurs last.

Question 3

Which is not a requirement to obtain a builder’s license?
Associated Answers
1 taking a builder’s course and a one year apprenticeship
2 taking and passing the residential builder’s examination
3 paying the required license fee
4 completion of 60 hrs. of required study

Answer 3

1 taking a builder’s course and a one year apprenticeship

Question 4

A proper notification of change of address must be made within:
Associated Answers
1 10 days
2 30 days
3 45 days
4 60 days

Answer 4

2 30 days

Question 5

What is the first step the Department will take to resolve a complaint between a buyer and builder?
Associated Answers
1 file a cease and desist order against the builder
2 file a summary suspension of the builder’s license
3 hold an informal conference
4 hold a contested case hearing

Answer 5

3 hold an informal conference

Question 6

At what point after a completed contract will the Department not investigate a complaint?
Associated Answers
1 a certificate of occupancy is issued
2 a purchase agreement is signed
3 the building is occupied
4 18 months after completion, occupancy, or purchase, whichever occurs later

Answer 6

4 18 months after completion, occupancy, or purchase, whichever occurs later

Question 7

A license can be revoked without a hearing:
Associated Answers
1 true
2 false
3 not if the builder shows good faith
4 if the builder is from another state

Answer 7

1 true

Question 8

A father is the only qualified builder in a partnership he has with his son. The father dies. In order for the son to continue with the business, the son must:
Associated Answers
1 deliver to the Department a copy of the death certificate
2 request that the license be transferred to the son’s name
3 complete the license application procedure, including taking and passing the exam
4 claims residential inheritance

Answer 8

3 complete the license application procedure, including taking and passing the exam

Question 9

If the license of the qualified officer, partner, trustee, director, officer, member, or person exercising control of the corporation, partnership, or other association is revoked, or denied, the license of the corporation, partnership or other association shall:
Associated Answers
1 be suspended
2 remain in effect for 30 days
3 be issued under an assumed name (d.b.a.)
4 lapse at the end of the month

Answer 9

1 be suspended

Question 10

The phrase “good moral character” typically means:
Associated Answers
1 person has no bankruptcies
2 strong religious convictions
3 person is honest and fair
4 person has never been incarcerated

Answer 10

3 person is honest and fair

Question 11

An applicant operating as a corporation must submit which of the following to the Department?
Associated Answers
1 copy of the articles of incorporation
2 certified copy of sales tax license number
3 names and addresses of corporation board members
4 all of the above

Answer 11

4 all of the above

Question 12

If, as a licensed builder, you file for bankruptcy, you:
Associated Answers
1 are in violation of the Code and may be subject to any one of the several penalties
2 must post bond with the Bureau
3 can continue to operate for not more than 90 days
4 none of the above

Answer 12

1 are in violation of the Code and may be subject to any one of the several penalties

Question 13

What is a change in specifications prior to bidding called?
Associated Answers
1 a completed application
2 change order
3 addition to the contract
4 change in specifications

Answer 13

4 change in specifications

Question 14

A licensee found guilty of one Article 6 violation may be:
Associated Answers
1 suspended, revoked, censured, or placed on probation
2 suspended, revoked, censured, placed on probation, and/or fined
3 suspended or reprimanded by the Labor Bureau
4 suspended, or placed on probation

Answer 14

2 suspended, revoked, censured, placed on probation, and/or fined

Question 15

A person who has had a limitation placed on a license may petition the Department, in writing, for a review of the decision to place the limitation. The licensee has how many days to file this petition?
Associated Answers
1 5 days
2 15 days
3 30 days
4 60 days

Answer 15

3 30 days

Question 16

An unlicensed builder, Mr. Spencer, contracts to add a room on to homeowner Jones’ house. Upon completion, Mr. Jones refuses to pay builder Spencer for his services. Mr. Spencer:
Associated Answers
1 can tear down the room
2 can record a lien on Mr. Jones’ property
3 can sue Mr. Jones for his fee, plus court costs
4 has no recourse

Answer 16

4 has no recourse

Question 17

According to the Occupational Code, the following is not a residential builder:
Associated Answers
1 one who demolishes houses
2 one who works for an hourly wage for his labor in building a house
3 one who assembles prefabricated housing
4 one who provides plans, labor and materials for the building of a house

Answer 17

2 one who works for an hourly wage for his labor in building a house

Question 18

The board member who has participated in an investigation on a complaint filed with the Department, or who has attended an informal conference, _______ participate in making the final decision on that complaint.
Associated Answers
1 must
2 must not
3 may arbitrate to
4 may be appointed to

Answer 18

2 must not

Question 19

A residential builder or maintenance and alteration contractors license is not required if:
Associated Answers
1 you contract to build a house as an electrician
2 you build homes part time
3 you are an officer of a court acting within the terms of the officer’s office
4 you work for a non-profit organization

Answer 19

3 you are an officer of a court acting within the terms of the officer’s office

Question 20

A license may be revoked for (mark incorrect answer):
Associated Answers
1 a violation of a building code
2 disregarding blueprints and specifications
3 mishandling deposit money
4 both spouses not signing the contract

Answer 20

4 both spouses not signing the contract

Question 21

The law regulating licensing of the building trades is known as:
Associated Answers
1 Occupational Code of 1980
2 Public Act 299 of 1980
3 Michigan Builders License Law
4 both A and B

Answer 21

4 both A and B

Question 22

A salesperson cannot start selling until he receives his:
Associated Answers
1 license and pocket ID card
2 admittance letter for the examination
3 OK from the builder
4 until he or she sends in the application for the examination

Answer 22

1 license and pocket ID card

Question 23

When a builder or contractor wants to advertise in the media, he must:
Associated Answers
1 furnish his license number before any advertising begins
2 furnish his license name and address
3 both a and b
4 neither, if he’s just in town for a while

Answer 23

3 both a and b

Question 24

What is considered a legitimate place of business for a licensed builder?
Associated Answers
1 a post office box number
2 a telephone answering service
3 an actual established, physical location from which the builder can and does conduct business and where books and records are kept
4 the residential construction site

Answer 24

3 an actual established, physical location from which the builder can and does conduct business and where books and records are kept

Question 25

If the qualifying officer, who is licensed for a business, has his license suspended:
Associated Answers
1 the salesperson license is held in escrow
2 the salesperson license is also suspended
3 a temporary license is granted while the board investigates the aspects of the suspension
4 the business may continue to operate with civil court guidance

Answer 25

2 the salesperson license is also suspended

Question 26

What reason may the Department use for the denial of an application for a license?
Associated Answers
1 non-issuance of a surety bond
2 a notice of furnishing being issued
3 good and sufficient cause
4 not having insurance coverage

Answer 26

3 good and sufficient cause

Question 27

Failure to act on a complaint that construction is structurally/materially deficient is:
Associated Answers
1 punishable by fine or imprisonment
2 cause for federal involvement
3 is always the fault of the subcontractors
4 is not a problem if the complaint is 60 days old

Answer 27

1 punishable by fine or imprisonment

Question 28

Who is entrusted to enforce the licensing act requirements in the State of Michigan and who may prosecute?
Associated Answers
1 Attorney General enforces, the Department prosecutes
2 Department enforces, Attorney General prosecutes
3 the Department (BOPR)
4 the Judge Advocate General

Answer 28

2 Department enforces, Attorney General prosecutes

Question 29

Failure of an individual licensee or qualifying officer to appear before an informal conference may be the basis for:
Associated Answers
1 suspension
2 revocation
3 denial of a license
4 all of the above

Answer 29

4 all of the above

Question 30

When a salesperson terminates employment, what must the builder do?
Associated Answers
1 the builder must wait for a state requisition
2 the builder must wait for a written request by the salesperson
3 the builder must return the salesperson’s license within 5 days by certified mail
4 the builder must wait for the salesperson’s relinquishment of the sales card

Answer 30

3 the builder must return the salesperson’s license within 5 days by certified mail

Question 31

A commission can be paid to you for the sale of goods and services of a builder provided:
Associated Answers
1 it is occasional and supplemental income
2 you are related to a licensee
3 you are employed by the provider of the stated goods and services and you hold a salesperson license
4 you hold a real estate license

Answer 31

3 you are employed by the provider of the stated goods and services and you hold a salesperson license

Question 32

If the company’s license is revoked, the salesperson’s license:
Associated Answers
1 is extended for six months or until the salesperson finds a new employment
2 is suspended
3 remains in effect, if the salesperson was not involved in any wrong doing
4 automatically transferred to the state

Answer 32

2 is suspended

Question 33

If Mr. Write holds a Maintenance and Alteration Contractor’s License in the State of Michigan, what must he do to obtain a Residential Builder’s License?
Associated Answers
1 submit an application with the required fee
2 take and pass the test for residential builders
3 nothing, because the licenses are essentially the same thing
4 take a builders prelicensing class

Answer 33

2 take and pass the test for residential builders

Question 34

What must a licensee submit to the Bureau to be licensed as a corporation?
Associated Answers
1 qualifying officer’s license number and certificate of incorporation
2 tax ID number, names and addresses of corporate officers and the certificate of incorporation
3 address of the corporation where the license will be displayed and books and records kept
4 all of the above

Answer 34

2 tax ID number, names and addresses of corporate officers and the certificate of incorporation

Question 35

An unlicensed builder who has the homeowner pull all building permits for the builder to construct a residential building over $599:
Associated Answers
1 is absolved from all liability
2 is legally circumventing the law
3 is in violation of the Department laws
4 is in violation of the Construction Lien Act

Answer 35

3 is in violation of the Department laws

Question 36

Which of the following is exempt from being licensed?
Associated Answers
1 maintenance and alteration contractor
2 residential builder
3 garage builder
4 approved US Government official

Answer 36

4 approved US Government official

Question 37

A builder has how long to renew his license after the expiration of his last license, without retaking the exam:
Associated Answers
1 two years
2 three years
3 thirty days
4 ninety days

Answer 37

2 three years

Question 38

An applicant shall not be refused a license without:
Associated Answers
1 first obtaining an attorney
2 being deemed to have bad moral character
3 having an opportunity for a hearing before the Department
4 a valid driver’s license

Answer 38

3 having an opportunity for a hearing before the Department

Question 39

The Residential Builders license is only issued by the:
Associated Answers
1 Michigan Department of Labor
2 local building inspectors
3 Department of Licensing and Regulatory Affairs
4 Governor’s Office

Answer 39

3 Department of Licensing and Regulatory Affairs

Question 40

Following a complaint, the Attorney General’s Office may order a builder to stop all work. Such a demand is known as:
Associated Answers
1 a liability order
2 a cease & desist order
3 a revocation
4 a suspension

Answer 40

2 a cease & desist order

Question 41

“Commission” means:
Associated Answers
1 a “board” other than an agency
2 an agency other than a board
3 the same as “agency”
4 the same as “board”

Answer 41

2 an agency other than a board

Question 42

In the Occupational Code, “Department” means:
Associated Answers
1 Department of Labor
2 Department of Attorney General
3 Department of Licensing and Regulatory Affairs “LARA”
4 Department of H.U.D.

Answer 42

3 Department of Licensing and Regulatory Affairs “LARA”

Question 43

Who decides what penalty will be imposed against a residential builder who violates the occupational code?
Associated Answers
1 Builder’s Board
2 the Director of the Department, if the Board fails to take action within 60 days
3 Civil Liberties Union
4 both A and B

Answer 43

4 both A and B

Question 44

If a residential builder’s license is suspended:
Associated Answers
1 the sales people remain licensed for 30 days or until they find another builder
2 the builder’s salespersons’ licenses are also suspended
3 the builder’s salespersons are responsible for returning their license
4 none of the above

Answer 44

2 the builder’s salespersons’ licenses are also suspended

Question 45

Who submits a salesperson’s license application?
Associated Answers
1 the builder
2 the salesperson
3 the department
4 the testing company

Answer 45

1 the builder

Question 46

Expiration date of a residential builders license shall be:
Associated Answers
1 annually on their application date
2 every year on the anniversary of their license
3 May 31
4 June 1

Answer 46

3 May 31

Question 47

The members of the board are appointed by the:
Associated Answers
1 commission
2 Governor, with the advice and consent of the senate
3 legislature
4 senate with the approval of the Governor

Answer 47

2 Governor, with the advice and consent of the senate

Question 48

Which of the following is a violation of the articles regulating the occupation?
Associated Answers
1 practicing fraud or deceit in obtaining a license
2 practicing fraud, deceit or dishonesty in practicing an occupation
3 violating a rule of conduct of an occupation
4 all of the above

Answer 48

4 all of the above

Question 49

Which of the following could be a penalty for violating an article regulating an occupation?
Associated Answers
1 placement of a limitation on a license
2 suspension of a license
3 revocation of a license
4 all of the above

Answer 49

4 all of the above

Question 50

Upon the completion of the contract between the builder and the homeowner, what is delivered?
Associated Answers
1 building agreement only
2 specifications for construction only
3 a copy of all instruments executed by the principals
4 his new furniture

Answer 50

3 a copy of all instruments executed by the principals

Question 51

An alternate form of testing must be provided for:
Associated Answers
1 a person with a physical handicap
2 a person with a mental handicap
3 request for an oral exam after failing the exam
4 all of the above

Answer 51

4 all of the above

Question 52

All records kept in the office of the Department shall be:
Associated Answers
1 open to the public
2 closed to the public
3 closed to the public, unless opened by court order
4 open only by federal intervention

Answer 52

1 open to the public

Question 53

A builder:
Associated Answers
1 need not display the license of his salesperson
2 must display the licenses of his salespersons in his place of business
3 need not have a licensed salesperson sell his goods and services
4 must display his salespersons licenses on each remodel job

Answer 53

2 must display the licenses of his salespersons in his place of business

Question 54

A residential contractor and a commercial contractor have the same regulatory commission for new construction of:
Associated Answers
1 four-story apartment buildings
2 small strip malls
3 jewelry store
4 all of the above

Answer 54

4 all of the above

Question 55

A complaint has been filed against a builder. In order for the dispute to be settled informally:
Associated Answers
1 a fine will be imposed
2 agreement must be reached between both parties and the Bureau
3 the builder must agree to a suspension of his license
4 the Board must take civil action in addition to the resolution of the complaint

Answer 55

2 agreement must be reached between both parties and the Bureau

Question 56

A valid reason for a general contractor to withhold payment from a licensed subcontractor would be:
Associated Answers
1 a draw made by subcontractor, which is not processed by the contractor
2 an improperly placed purchase order by the contractor
3 unacceptable work by the subcontractor
4 unacceptable work by the contractor

Answer 56

3 unacceptable work by the subcontractor

Question 57

If a builder decides to sell his business:
Associated Answers
1 he can sell his business only to a person who is already operating as a licensed builder
2 the business cannot be sold: its assets must be liquidated and it must be dissolved
3 the new owner must be licensed, or take the test and become licensed before he could operate the company
4 he can sell both his license and business to another person

Answer 57

3 the new owner must be licensed, or take the test and become licensed before he could operate the company

Question 58

In the Occupational Code, the word “Board” means:
Associated Answers
1 Board of Licensing and Regulation
2 Residential Builders and Maintenance and Alteration Contractors Board
3 Board of Review
4 Board of Examiners

Answer 58

2 Residential Builders and Maintenance and Alteration Contractors Board

Question 59

The “Respondent” in a complaint proceeding is:
Associated Answers
1 the person who files a complaint
2 the person against whom the complaint is filed
3 the person who investigates the complaint
4 the person who, in writing, makes the complaint known to the public

Answer 59

2 the person against whom the complaint is filed

Question 60

If the builder disputes the material facts of the complaint against him, the Board may:
Associated Answers
1 ask for a report from the building official in the area of the complaint
2 make an inspection to determine the facts
3 ask the complainant to furnish more information
4 any of the above

Answer 60

4 any of the above

Question 61

You can file a complaint against a builder or contractor if you are:
Associated Answers
1 the local building official
2 a dissatisfied customer
3 the Attorney General
4 any of the above

Answer 61

4 any of the above

Question 62

Which of the following cannot be done without a licensed contractor?
Associated Answers
1 building a house for your own use
2 repairs to a house by the owner
3 dividing a house into apartments by the owner
4 building a structure that will have both commercial and residential use

Answer 62

4 building a structure that will have both commercial and residential use

Question 63

An M & A contractor licensed for carpentry would like to install a roof. The contractor:
Associated Answers
1 must write the word “roofing” on the license
2 must take and pass the M & A contractor test for roofing
3 must use employees who are licensed roofers
4 can proceed. The existing license will also be good for roofing

Answer 63

2 must take and pass the M & A contractor test for roofing

Question 64

In the Occupational Code, “place” means:
Associated Answers
1 the place at which construction takes place
2 the physical location out of which one does business
3 a post office box
4 a telephone answering service

Answer 64

2 the physical location out of which one does business

Question 65

A contempt of court citation can be issued against a builder who is the object of a complaint:
Associated Answers
1 in lieu of an administrative hearing
2 prior to a formal investigation of a complaint
3 as a penalty for violation of the code
4 for willful refusal to cooperate in the investigation of a complaint

Answer 65

4 for willful refusal to cooperate in the investigation of a complaint

Question 66

Each member of a partnership or corporation must have a Builders License.
Associated Answers
1 True
2 False

Answer 66

2 False

Question 67

If a licensed builder hires a salesman to work part time on a salary, a salesman’s license is not required.
Associated Answers
1 True
2 False

Answer 67

2 False

Question 68

Who sets the standards of conduct, performance, qualifications and fitness of applicants, conducts investigations, and settles complaints?
Associated Answers
1 the Committee
2 the Board
3 the Senate
4 the Attorney General

Answer 68

2 the Board

Question 69

Failure to appear for an informal conference may result in:
Associated Answers
1 suspension of a license
2 denial of a license
3 revocation of a license
4 any one of the above

Answer 69

4 any one of the above

Question 70

If a company is organized as a Corporation, Limited Liability Company or a Partnership, must both the company and the qualifying officer puchase a license?
Associated Answers
1 Yes
2 No

Answer 70

1 Yes

Question 71

The Department’s request for a current and accurate financial statement must be:
Associated Answers
1 sent by registered mail
2 served by the courts
3 signed by the Attorney General
4 a written demand

Answer 71

4 a written demand

Question 72

Which of the following are violations of the Occupational Code?
Associated Answers
1 abandonment (without legal excuse) of a contract, construction project, or operation engaged in or undertaken by the licensee
2 diversion of funds or property received for completion of a specific construction project or operation for any other construction project or operation, obligation, or purpose
3 failure to account for or remit money coming into the person’s possession which belongs to others
4 all of the above

Answer 72

4 all of the above

Question 73

It is a violation of the Occupational Code, in a maintenance and alteration contract, for the licensee to fail to furnish, to the lender, the purchaser’s signed completion certificate executed upon completion of the work to be performed under the contract:
Associated Answers
1 yes
2 no
3 Under Federal Law
4 not in township jurisdiction

Answer 73

1 yes

Question 74

When do you, as a sole proprietor, have to file and pay into the unemployment fund?
Associated Answers
1 when you have three or more employees
2 when you have one employee who works less than 35 hours per week
3 when gross wages paid out exceed $1,000.00
4 payment into the unemployment fund is not required by law

Answer 74

3 when gross wages paid out exceed $1,000.00

Question 75

If a Maintenance and Alteration contractor, licensed as a carpenter, wants to add to his trade, such as roofing, must he take the roofing exam?
Associated Answers
1 yes
2 not if it’s less than 50% of his business
3 no, he can do roofing with his existing license
4 no, he must take the residential builders examination

Answer 75

1 yes

Question 76

Members of the Maintenance and Alteration Contractor’s Board are:
Associated Answers
1 voted for by the general public
2 appointed by the Governor with the consent of the senate
3 appointed by the Board
4 appointed by the Governor with the consent of the house of representatives

Answer 76

2 appointed by the Governor with the consent of the senate

Question 77

A license must be renewed on or before:
Associated Answers
1 January 31
2 December 31
3 May 31
4 June 3

Answer 77

3 May 31

Question 78

Which of the following are not required to have a Residential Builder’s license because they are licensed under a separate law?
Associated Answers
1 an electrical contractor
2 H.A.V. contractor
3 a plumbing contractor
4 all of the above

Answer 78

4 all of the above

Question 79

A person who, for compensation of $600.00 or more, undertakes with another the repair, alteration of, addition to, subtraction from, improvement of, moving of, or wrecking of a residential building must be licensed as a:
Associated Answers
1 Commercial Builder
2 Residential Builder or Maintenance and Alteration Contractor
3 Electrical Contractor
4 Handyman

Answer 79

2 Residential Builder or Maintenance and Alteration Contractor

Question 80

An employee or agent of a licensed residential builder or maintenance and alteration contractor who, for compensation, sells, negotiates, solicits for, furnishes or attempts to furnish the goods and services of a residential builder or maintenance and alteration contractor must:
Associated Answers
1 be honest and a good salesperson
2 be licensed as a residential builder
3 be licensed as a salesperson
4 be licensed as a residential maintenance and alteration contractor

Answer 80

3 be licensed as a salesperson

Question 81

The following are exempt from licensure except:
Associated Answers
1 a government representative
2 an owner of rental property, with reference to the maintenance and alteration of that rental property
3 a person working on one undertaking or project by one or more contracts in which the total contract price is more than $600.00
4 a person operating under an order of the court

Answer 81

3 a person working on one undertaking or project by one or more contracts in which the total contract price is more than $600.00

Question 82

The Department and Board may remove a limitation on a license:
Associated Answers
1 if the licensee retests
2 if the licensee makes restitution
3 if they determine that he could perform with competence each function of the occupation
4 both A and B

Answer 82

3 if they determine that he could perform with competence each function of the occupation

Question 83

A builder licensed as Robert Conrad Building Company may advertise as:
Associated Answers
1 Robert Conrad Building Company
2 Conrad Building Company
3 Bob The Builder
4 Robert Conrad Construction

Answer 83

1 Robert Conrad Building Company

Question 84

When contracting with a builder to build a house from a set of plans, the builder must provide to the purchaser:
Associated Answers
1 a set of plans
2 a set of the specifications
3 a fully executed copy of all agreements between them
4 all of the above

Answer 84

4 all of the above

Question 85

A restricted license could be one in which:
Associated Answers
1 the licensee may be restricted to a specific function of the occupation
2 the licensee may be restricted to a specified geographical location
3 the licensee may be required to have all of his contracts reviewed by an attorney
4 all of the above

Answer 85

4 all of the above

Question 86

Which of the following does not require licensing?
Associated Answers
1 maintenance and alteration contractor
2 residential builder
3 garage builder
4 commercial builder

Answer 86

4 commercial builder

Question 87

The effective date of the Occupational Law for Residential Builders and Maintenance and Alteration Contractors is:
Associated Answers
1 January 31, 1966
2 January 1, 1966
3 October 21, 1980
4 no such law

Answer 87

3 October 21, 1980

Question 88

If you are issued a cease and desist order following a complaint, you:
Associated Answers
1 must cease building for one year
2 are entitled to a hearing before the Bureau, if a written request is made within 30 days
3 have no recourse to regain your license, except by a lawsuit
4 may build until the end of the month

Answer 88

2 are entitled to a hearing before the Bureau, if a written request is made within 30 days

Question 89

As used in the Occupational Code:
Associated Answers
1 “complaint” means a verbal or written grievance
2 “board” means apathetic
3 “incompetence” means government action
4 “licensee” means the applicant

Answer 89

1 “complaint” means a verbal or written grievance

Question 90

A person shall not have a license issued to him or her until the person:
Associated Answers
1 pays the required fee
2 meets the requirements 10 through 26
3 files certificates of insurance
4 all of the above

Answer 90

1 pays the required fee

Question 91

Public Act 299 provides for licensing and the right to engage in business as:
Associated Answers
1 salesperson
2 residential builder
3 maintenance contractor
4 all of the above

Answer 91

4 all of the above

Question 92

A person registering a complaint with the Department against a builder must do so within:
Associated Answers
1 90 days
2 12 months of the purchase
3 18 months of sale, completion, or occupancy, whichever occurs later
4 60 days of the sale

Answer 92

3 18 months of sale, completion, or occupancy, whichever occurs later

Question 93

Act 299 has a specific licensure exemption for:
Associated Answers
1 all 9 members of the builder’s board
2 unlicensed builders who disclose their status to their clients
3 employees of licensed builders
4 employees of unlicensed builders

Answer 93

3 employees of licensed builders

Question 94

Who can licensed contractors bring to a hearing to speak on their behalf?
Associated Answers
1 his or her subcontractors
2 a duly authorized representative or attorney
3 the Board member who participated in the investigation
4 they are not allowed to defend themselves

Answer 94

2 a duly authorized representative or attorney

Question 95

What is the purpose of an investigative conference?
Associated Answers
1 to determine what the penalty should be
2 to terminate or suspend the license
3 to determine if there is cause for a hearing or complaint
4 to establish the amount of the fine

Answer 95

3 to determine if there is cause for a hearing or complaint

Question 96

How many days advance notice will a person be given before an investigative conference is held?
Associated Answers
1 5 days
2 10 days
3 15 days
4 30 days

Answer 96

2 10 days

Question 97

How many days does a person have from receipt of a complaint to respond?
Associated Answers
1 5 days
2 10 days
3 15 days
4 30 days

Answer 97

3 15 days

Question 98

Can the Department demand a financial statement at any time?
Associated Answers
1 no
2 yes, and the builder shall respond within 30 days
3 yes, and the builder shall respond within 15 days
4 yes, and the builder shall respond within 45 days

Answer 98

2 yes, and the builder shall respond within 30 days

Question 99

Can a builder solicit a contract by promising the purchaser a bonus which is contingent upon the purchaser displaying his dwelling to a third person?
Associated Answers
1 yes, if the agreement is in writing and fully executed
2 no, never
3 yes, as long as the bonus is a fixed amount and not a percentage
4 yes, as long as it is not in writing

Answer 99

2 no, never

Question 100

When a salesperson terminates employment with a builder, what must the salesperson do?
Associated Answers
1 the salesperson returns the license within 5 days via regular mail
2 the salesperson returns the ID pocket card via certified mail within 30 days
3 the salesperson returns the pocket ID card via certified mail within 5 days
4 the builder returns both the pocket ID card and the license to the Department within 5 days via certified mail

Answer 100

3 the salesperson returns the pocket ID card via certified mail within 5 days

Question 101

Where should the licenses be displayed in a builder’s office?
Associated Answers
1 on the bathroom wall
2 on the office wall in a conspicuous position
3 in a secure place where they will not be stolen
4 in the file cabinet with other important papers

Answer 101

2 on the office wall in a conspicuous position

Question 102

Who sets the standards of conduct, performance, qualifications and fitness of applicants, conducts investigations, settles complaints, and handles disciplinary procedures?
Associated Answers
1 the board
2 the Governor
3 the applicant
4 the “Act”

Answer 102

1 the board

Question 103

A licensee, upon written demand and notice by the Department, shall within _______ days submit a current and accurate financial statement showing his or her current financial status.
Associated Answers
1 10
2 15
3 30
4 60

Answer 103

3 30

Question 104

What is the completion date of a structure?
Associated Answers
1 upon final inspection by state and local inspectors
2 upon final approval of state and local inspectors
3 the date the certificate of occupancy is issued
4 all of the above

Answer 104

3 the date the certificate of occupancy is issued

Question 105

Which of the following cannot be used by the Department to determine the fitness of an applicant to hold a license:
Associated Answers
1 your scores on a license test
2 an arrest for an offense, which is not followed by conviction
3 your general financial solvency
4 your standards of professionalism and competency

Answer 105

2 an arrest for an offense, which is not followed by conviction

Question 106

When criminal charges are brought against a builder he:
Associated Answers
1 can avoid a penalty by assigning blame to his subcontractors
2 has the same right to legal process as anyone accused of an offense
3 can no longer do business in Michigan
4 can only ask for a hearing before the Bureau of Professional and Occupational Regulation

Answer 106

2 has the same right to legal process as anyone accused of an offense

Question 107

If the builder decides on his own to use cheaper materials than specified without a change order he is:
Associated Answers
1 acting in violation of the code, even if the materials themselves are not in violation of the code
2 breaking the contract between himself and the owner
3 limiting his legal claim to payment by the owner
4 all of the above

Answer 107

4 all of the above

Question 108

When a builder signs a citation issued by the Bureau, it:
Associated Answers
1 means the builder cannot be further penalized by the Bureau for that offense
2 is acceptance of a cease and desist order
3 only indicates that the citation has been received by the builder
4 means that the builder has admitted to the violation and has forfeited his right to a hearing

Answer 108

3 only indicates that the citation has been received by the builder

Question 109

If you are issued a cease and desist order following a complaint, you:
Associated Answers
1 must cease building for a period of one year
2 have no recourse to regain your license except by bringing suit against the Bureau
3 are entitled to a hearing before the Bureau, if a written request is made within 30 days
4 must post bond equal to the contract amount for the project

Answer 109

3 are entitled to a hearing before the Bureau, if a written request is made within 30 days

Question 110

If a company loses their qualifying officer, the company’s license is suspended.
Associated Answers
1 true
2 false

Answer 110

1 true

Notes: If requested, the Department may allow the company’s license to remain in force for a reasonable time in order to get a new qualifying officer.

Question 111

If you wish to renew a license that has expired within 60 days of the expiration date, you must pay a late renewal fee of ____ plus the license fee.
Associated Answers
1 $10
2 $20
3 $30
4 $40

Answer 111

2 $20

Question 112

How many board members are needed to constitute a quorum?
Associated Answers
1 4
2 5
3 6
4 7

Answer 112

2 5

Question 113

Sole proprietors, corporations, LLCs and partnerships all have to purchase a license. What other entities require the purchase of a license?
Associated Answers
1 sales persons
2 qualifying officers of Corps, LLCs and Partnerships
3 all branch offices
4 all of the above

Answer 113

4 all of the above

Question 114

)If there is a contractual agreement to use arbitration as a means of settling disputes, will the board take action against a licensee if the step required in the arbitration agreement are met by the contractor.
Associated Answers
1 yes
2 no

Answer 114

2 no

Notes: Typically the court recognizes the arbitrators’ decision to be final.

Question 115

What must sales people and contractors use to identify themselves to potential customers in door to door sales?
Associated Answers
1 their business card
2 their wallet license ID card
3 their license number
4 any of the above

Answer 115

2 their wallet license ID card

Question 116

A corporation has three branch offices and six sales people. If all of these licenses expire in the same year, how many licenses must be renewed by May 31st?
Associated Answers
1 2
2 5
3 8
4 11

Answer 116

4 11

Notes: 1 for their qualifier, 1 for the corporation, 3 for the branch offices and 6 for the sales people.

Question 117

Sworn Statements are required by law to be used by contractors as a means of relinquishing financial transparency to the owners, material providers or subcontractors. If the owner requested a copy of a builders sworn statement, how may days does the contractor have to provide it?
Associated Answers
1 1
2 3
3 7
4 10

Answer 117

4 10

Question 118

The company’s listed on a contractors sworn statement will typically be material providers and subcontractors.
Associated Answers
1 true
2 false

Answer 118

1 true

Question 119

How many days does a contractor or material provider have to file a lien against an owner’s property from their last day on the job or from time of purchase
Associated Answers
1 30 days
2 45 days
3 60 days
4 90 days

Answer 119

4 90 days

Question 120

Subcontractors and material suppliers must provide to the owner of a project their “Notice of Furnishings” with ____ days of first providing any labor or materials.
Associated Answers
1 5
2 10
3 15
4 20

Answer 120

4 20

Question 121

A person who files a lien must take action to foreclose on the lien within _______.
Associated Answers
1 30 days
2 3 months
3 6 months
4 1 year

Answer 121

4 1 year

Question 122

Owners must make available a “Notice of Commencement” which will provide the correct information as to the owner or owners of a property and their correct addresses. If a contractor requests a copy the owner must provide it within ________.
Associated Answers
1 10 days
2 15 days
3 20 days
4 30 days

Answer 122

1 10 days

Question 123

Contractors who understand what their responsibilities are under the lien laws of Michigan will file the necessary forms and protect their right to be paid.
Associated Answers
1 true
2 false

Answer 123

1 true

Question 124

Both LLCs and _______ need to provide copies of their Articles of Incorporation when applying for a license.

Associated Answers
1 Sole Proprietorships
2 Joint Ventures
3 Partnerships
4 Corporations

Answer 124

4 Corporations

Question 125

Passing test scores are only good for:

Associated Answers
1 90 days
2 1 year
3 18 months
4 2 years

Answer 125

2 1 year

Question 126

Salespeople may only work under one contractor at a time.

Associated Answers
1 True
2 False

Answer 126

1 True

Question 127

If a license is suspended or revoked, the licensee must return it to the Department within:

Associated Answers
1 3 days
2 5 days
3 7 days
4 10 days

Answer 127

4 10 days

Question 128

If a qualifying officer leaves a company, they have ______ to notify the Department in writing.

Associated Answers
1 10 days
2 24 hours
3 30 days
4 60 days

Answer 128

1 10 days

Question 129

Residential builders are required by law to have an actual office in Michigan where their business records are kept.

Associated Answers
1 True
2 False

Answer 129

1 True

Question 130

Which of the following does not need to be included in a residential construction contract?

Associated Answers
1 specifications and plans
2 costs
3 type and amount of work to be done
4 professional architect or engineer approval

Answer 130

4 professional architect or engineer approval

Question 131

If someone makes a complaint aggainst you, you must respond to the notice within _____ of receipt.

Associated Answers
1 7 days
2 10 days
3 15 days
4 30 days

Answer 131

3 15 days

Question 132

If you have let your licesne lapse, you are still responsible for reporting a change of address:

Associated Answers
1 up to 7 years after the license has changed
2 3 years after all complaints have been closed
3 Until all final orders have been complied with
4 Any of the above

Answer 132

4 Any of the above

Question 133

If you are late to renew your license, there is a fee of:

Associated Answers
1 $15
2 $20
3 $25
4 $50

Answer 133

2 $20

Question 134

An arrest record that was not followed by a conviction is still considered as a count against you when applying for a license.

Associated Answers
1 True
2 False

Answer 134

2 False

Question 135

The ___________ is a Michigan specific civil rights legislation.

Associated Answers
1 Walsh-Healy Act
2 Elliott-Larson Civil Rights Act
3 Civil Rights Act of 1866
4 Fair Housing Act

Answer 135

2 Elliott-Larson Civil Rights Act

Question 136

Which of the following is NOT exempt under the Ellliott-Larson and Persons with Disabilities Acts?

Associated Answers
1 rental of a unit in a two-family dwelling that is occupied by the owner
2 rental of a room in a single-family dwelling occupied by the owner
3 sale of a by the owner of a unit in a two-family dwelling
4 rental of a unit in a multi-family dwelling

Answer 136

4 rental of a unit in a multi-family dwelling

Question 137

These laws shape and influence what job restrictions and qualifications may be established, how advertisement are placed and what tests may be used in the applicant screening process.

Associated Answers
1 Equal Employment Opportunity
2 Fair Housing
3 Dodd-Frank
4 TRID

Answer 137

1 Equal Employment Opportunity

Question 138

Which of the following is NOT an acceptable question or topic to discuss with a potential candidate?

Associated Answers
1 Reason for leaving their previous job
2 Description of a typical day at current job
3 Birthplace of the applicant or their parents
4 How long they have been job hunting

Answer 138

3 Birthplace of the applicant or their parents

Question 139

Which of the following pre-employment questions pose legal implications by tending to single out specific protected classes?

Associated Answers
1 Previous arrest records
2 Financial status
3 Birth dates
4 All the above

Answer 139

4 All the above

Question 140

____ is a naturally occurring fibrous mineral.

Associated Answers
1 lead
2 asbestos
3 silica
4 radon

Answer 140

2 asbestos

Question 141

ACM (Asbestos Containing Material) is any material containing more than _____ % asbestos.

Associated Answers
1 1%
2 5%
3 7%
4 10%

Answer 141

1 1%

Question 142

Records of asbestos exposure must be kept for:

Associated Answers
1 5 years
2 10 years
3 20 years
4 30 years

Answer 142

4 30 years

Question 143

The agency responsible for promulgating and enforcing the Renovation, Repair and Painting Program is:

Associated Answers
1 DNR
2 EEOC
3 HUD
4 EPA

Answer 143

4 EPA

Question 144

When considering lead-based paint exposure, are hospitals considered “target” housing?

Associated Answers
1 Yes
2 No

Answer 144

2 No

Question 145

Houses built before _______ typically have lead paint risk factors.

Associated Answers
1 1990
2 1978
3 2000
4 2003

Answer 145

2 1978

Question 146

Since 2010, all contractors who work with homes built prior to 1978 with lead paint hazards must be certified renovators.

Associated Answers
1 True
2 False

Answer 146

1 True

Question 147

EPA has established limits for minor repairs of maintenance, that do not require compliance with the RRP Rule. Work that does not exceed _____ sq ft per interior room of 20 sq ft is exempt.

Associated Answers
1 4 sq ft
2 6 sq ft
3 8 sq ft
4 10 sq ft

Answer 147

2 6 sq ft

Question 148

RRP certifications are good for:

Associated Answers
1 2 years
2 3 years
3 5 years
4 6 years

Answer 148

3 5 years

Question 149

You may become certified by taking a 4 hour course provided by the local building department.

Associated Answers
1 True
2 False

Answer 149

2 False

Question 150

Documentation of renovations, testing and training related to renovations must be kept for:

Associated Answers
1 2 years
2 3 years
3 5 years
4 7 years

Answer 150

2 3 years

Question 151

This radioactive gas comes from the natural breakdown of uranium soil, rock and water.

Associated Answers
1 asbestos
2 radon
3 lead
4 Sulphur

Answer 151

2 radon

Question 152

A ______ layer of clean gravel below the slab allows radon gas to move more freely under the building.

Associated Answers
1 2 inch
2 3 inch
3 4 inch
4 6 inch

Answer 152

3 4 inch

Question 153

______ should be placed on top of the gravel base to prevent the radon gas from entering the house.

Associated Answers
1 rigid foam
2 loose fill
3 cardboard
4 heavy plastic sheeting

Answer 153

4 heavy plastic sheeting

Question 154

It is recommended you run a 3 or 4 inch PVC pipe from the gravel to the roof where radon can be safely vented out of the house.

Associated Answers
1 True
2 False

Answer 154

1 True

Question 155

Which business organization is regulated the least by the government?
Associated Answers
1 Limited Liability Company
2 Corporation
3 Partnership
4 Sole Proprietorship

Answer 155

4 Sole Proprietorship

Question 156

In a general partnership, each partner is liable for the debt of the company up to the percentage of the company they own.
Associated Answers
1 true
2 false

Answer 156

2 false

Question 157

What business organization provides the most financial protection for the owners?
Associated Answers
1 Sole Proprietorship
2 General partnership
3 Corporation
4 Limited Partnership

Answer 157

3 Corporation

Question 158

Sole Proprietorships can issue and sell stock in the company to raise capital.
Associated Answers
1 true
2 false

Answer 158

2 false

Question 159

Can a corporation actually be listed as the sole owner of a property?
Associated Answers
1 yes
2 no

Answer 159

1 yes

Question 160

Limited Liability Companies have the ability to be passed down to family members when an owner (member) dies.
Associated Answers
1 true
2 false

Answer 160

2 false

Question 161

Sub Chapter “S” Corporations can retain their status no matter how many stockholders they have.
Associated Answers
1 true
2 false

Answer 161

2 false

Question 162

If you are naming the Sole Proprietorship something other than your real name, you will need to file a Certificate of Assumed Name with the county clerk’s office.
Associated Answers
1 True
2 False

Answer 162

1 True

Question 163

A builder’s personal income will be reflected on tax returns except:
Associated Answers
1 Sole Proprietorship
2 Partnerships
3 Limited Liability Company’s
4 C-Corporations

Answer 163

4 C-Corporations

Question 164

A sole proprietorship is not considered to be a legal entity under the law, but rather is an extension of the individual who owns it.
Associated Answers
1 true
2 false

Answer 164

1 true

Question 165

Partnerships must file a certificate of co-partnership with the county clerk’s office in the counties in which you will be doing business.
Associated Answers
1 true
2 false

Answer 165

1 true

Question 166

A 50/50 partnership dissolves and one of the partners does not fulfill his responsibility to pay off creditors. To what extent must the other partner contribute to this debt in order to keep his good name and standing?
Associated Answers
1 50 %
2 75%
3 100%
4 these things can be negotiated

Answer 166

3 100%

Question 167

Corporations are entities that are separate and distinct from their owners. This means that the debt of the company does not transfer to the owners.
Associated Answers
1 true
2 false

Answer 167

1 true

Notes: Creditor will often require corporations, limited liability company’s and partnerships to sign a personal guarantee for repayment of loans, especially in the early stages of the company’s development.

Question 168

C- Corporations are taxed on their earnings at the corporate level and the owners are then taxed on any cash distribution they receive, this is referred to as?
Associated Answers
1 a rip off
2 double taxation
3 dividend taxation
4 none of the above

Answer 168

2 double taxation

Question 169

Corporations who qualify can elect to be treated as an _____________ to avoid double taxation.
Associated Answers
1 individual
2 separate entity
3 S-Corporation
4 LLC

Answer 169

3 S-Corporation

Question 170

S-Corporations, Partnerships and LLCs must all file income tax returns and pay tax on profits.
Associated Answers
1 true
2 false

Answer 170

2 false

Notes: Only C-Corporations pay tax on profits.

Question 171

Owners or members of S-Corporations, Partnerships and Limited Liability Company’s who collect distributions from profit made by these company’s pay individual income tax on these distributions.
Associated Answers
1 true
2 false

Answer 171

1 true

Question 172

An advantage that a Limited Liability Company has over a partnership is?
Associated Answers
1 employees can be issued a 1099
2 limited liability of the members
3 employers are not liable for unemployment tax
4 lower insurance cost

Answer 172

2 limited liability of the members

Question 173

Temporary storage facilities, dumpsters and utilities are considered _________ overhead.
Associated Answers
1 company
2 project
3 indirect
4 None of the above

Answer 173

2 project

Question 174

Indirect labor costs like taxes and insurance are sometimes referred to as ______________________________.
Associated Answers
1 Labor Burden
2 Cost of doing business
3 Payroll expenses
4 All of the above

Answer 174

1 Labor Burden

Question 175

A contractor should not only consider the costs of equipment needed to build the project, whether owned or rented, but also the operating/maintenance expenses, repair of, storage, delivery, finance cost, insurance, and taxes.
Associated Answers
1 true
2 false

Answer 175

1 true

Question 176

When adding profit to an estimate, the value is usually ___________________________.
Associated Answers
1 a flat fee
2 a percentage of the total job cost
3 30%
4 25%

Answer 176

2 a percentage of the total job cost

Question 177

What are the first steps in completing an estimate?
Associated Answers
1 Review project documents
2 Conduct environmental assessments
3 Inspect the job site
4 All of the above

Answer 177

4 All of the above

Question 178

Unit price estimates consist of assigning costs to each separate unit (task) of construction.
Associated Answers
1 true
2 false

Answer 178

1 true

Question 179

)A complete list of all of the materials and items of work that would be required to complete a project are ______________________________________________.
Associated Answers
1 material and time data sheets
2 quantity surveys (take off)
3 labor and material break downs
4 shopping lists

Answer 179

2 quantity surveys (take off)

Question 180

It is always wise to choose the subcontractor who provides the lowest bid.
Associated Answers
1 true
2 false

Answer 180

2 false

Question 181

What would be the best source to use when estimating job site overhead?
Associated Answers
1 Overhead site survey
2 Local lumber company
3 Historical job site overhead costs records
4 None of the above

Answer 181

3 Historical job site overhead costs records

Question 182

Recognizing that delays are inevitable, the schedule should plan for this by considering ____________________.
Associated Answers
1 Contingency time
2 Float time
3 Extra time
4 None of the above

Answer 182

1 Contingency time

Question 183

___________ can be added into an estimate to cover unexpected expenses.
Associated Answers
1 Contingency costs
2 Float costs
3 Extra costs
4 Overhead costs

Answer 183

1 Contingency costs

Question 184

Besides the actual cost of the materials themselves, what other cost must a builder recognize as being a material cost?
Associated Answers
1 Delivery cost
2 Material inspection
3 Storage
4 All of the above

Answer 184

4 All of the above

Question 185

____________________are reasonable estimates of funds set aside for a particular item in a project (such as lighting fixtures). The contractor is not held to that price.
Associated Answers
1 Budget overrides
2 Allowances
3 Budget tolerance expectancies
4 All of the above

Answer 185

2 Allowances

Question 186

The basic hourly wage incurred while an employee is being productive in the building process is known as ______________________________________.
Associated Answers
1 direct labor cost
2 scale
3 reasonable wage
4 overtime

Answer 186

1 direct labor cost

Question 187

An advantage to renting equipment can be __________ .
Associated Answers
1 short term need
2 distant job location
3 no maintenance costs
4 all of the above

Answer 187

4 all of the above

Question 188

This is a form of construction estimating in which a fixed price is given for the entire project.
Associated Answers
1 square foot method
2 lump sum method
3 unit price estimate
4 line item estimate

Answer 188

2 lump sum method

Question 189

Typical industry markup is _____%.
Associated Answers
1 10
2 15
3 18
4 20

Answer 189

2 15

Question 190

)The cost of having employees includes their hourly wage and other expenses not included in their wage such as, matching the employees social security and medicare contributions, unemployment and workers compensation expenses. These additional costs are called _________________.
Associated Answers
1 payroll taxes
2 negitive cash flow
3 labor burden
4 any of the above

Answer 190

3 labor burden

Question 191

Items not specified in the project plans such as plumbing fixtures, electrical fixtures, and flooring can be handled by negotiating a budget for these items not yet decided upon. These additional monies set aside for the owner are called ___________ .
Associated Answers
1 contingencies
2 allowances
3 contract take off items
4 none of the above

Answer 191

2 allowances

Question 192

The most accurate way of estimating labor cost is to refer to you company’s ___________________ from similar jobs in the past.
Associated Answers
1 historical data
2 files
3 foreman
4 any of the above

Answer 192

1 historical data

Question 193

Contractors who utilize a job cost recording system benefit by having these records to use for future bids.
Associated Answers
1 true
2 false

Answer 193

1 true

Question 194

Which of the following are overhead expenses?
Associated Answers
1 auto expenses
2 postage
3 office rental
4 all of the above

Answer 194

4 all of the above

Question 195

Which of the following are indirect job cost expenses?
Associated Answers
1 equipment depreciation
2 a superintendant at the jobsite
3 bonds and permits
4 all of the above

Answer 195

1 equipment depreciation

Question 196

Which of the following are direct job cost expenses?
Associated Answers
1 subcontractors fees
2 material costs
3 rental equipment fees
4 all of the above

Answer 196

4 all of the above

Question 197

A contractor developed his bid charging his customer $7.50 a square foot to purchase and install flooring materials. This type of estimate is referred to as?
Associated Answers
1 unit price estimate
2 lump sum
3 conceptual estimate

Answer 197

1 unit price estimate

Question 198

A good way of managing a job cost recording system is to require employees to provide for actual time doing specific task using designated codes on their time cards.
Associated Answers
1 True
2 False

Answer 198

1 True

Question 199

_________ assign a cost to each measurable item of work and these are listed separately on the estimate.

Associated Answers
1 Lump Sum estimates
2 Unit price estimates
3 Fixed price estimates
4 Detailed survey estimates

Answer 199

2 Unit price estimates

Question 200

In this type of estimate, a contractor agrees to perform a prescribed project for a single amount, even in the event that the actual cost may be more than the stipulated amount.

Associated Answers
1 Cost-plus fee
2 Unit price
3 Lump sum
4 Any of the above

Answer 200

3 Lump sum

Question 201

Any changes to the bid before it is due can be submitted by an _________.

Associated Answers
1 appeal
2 addendum
3 change order
4 submittal

Answer 201

2 addendum

Question 202

Factors that will influence and contribute to the cost of a project include all but the following:

Associated Answers
1 equipment
2 financial stability
3 overhead
4 degree of difficulty

Answer 202

2 financial stability

Question 203

Temporary storage facilities, dumpsters and utilities are considered _________ overhead.

Associated Answers
1 Company
2 Project
3 Indirect
4 None of the above

Answer 203

2 Project

Question 204

When adding profit to an estimate, the value is usually:

Associated Answers
1 A flat fee
2 A percentage of the total job cost
3 30%
4 25%

Answer 204

2 A percentage of the total job cost

Question 205

What are the first steps in completing an estimate?

Associated Answers
1 Review project documents
2 Conduct environmental assessments
3 Inspect the job site
4 All of the above

Answer 205

4 All of the above

Question 206

What would be the best source to use when estimating job site overhead?

Associated Answers
1 Overhead site survey
2 Local lumber company
3 Historical job site overhead costs records
4 None of the above

Answer 206

3 Historical job site overhead costs records

Question 207

A _____________ assigns tasks and materials to specific job categories, such as supervision, clean-up, labor/materials and project general conditions.

Associated Answers
1 Value Engineering System
2 Contingency Plan
3 Change Proposal Log
4 Job Cost System

Answer 207

4 Job Cost System

Question 208

Profit is the amount of money left over after a project is 100 percent complete and referred to as net, or clear profit.

Associated Answers
1 True
2 False

Answer 208

1 True

Question 209

In order for a contract to become a binding document, it must contain four key elements which are an offer and acceptance, competent parties, legal purpose and:
Associated Answers
1 Consideration
2 Evaluation
3 Notary
4 Witnesses

Answer 209

1 Consideration

Question 210

The term consideration means that both parties to a contract must be exchanging something of value.
Associated Answers
1 true
2 false

Answer 210

1 true

Question 211

What is the term used to identify changes made to contract documents before the execution of the basic owner contractor agreement?
Associated Answers
1 change orders
2 modifications
3 Addenda
4 All of the above

Answer 211

3 Addenda

Question 212

Oral contracts are valid, but are often difficult to enforce.
Associated Answers
1 true
2 false

Answer 212

2 false

Notes: Michigan requires that all residential construction projects be in writing!

Question 213

Terms used in a contract that allow the owner to withhold an agreed upon percentage of the contract funds until the project is 100% complete is called:
Associated Answers
1 Withholding allowance
2 Retainage
3 Retainer
4 Escrow

Answer 213

2 Retainage

Question 214

Losses paid by the contractor if the project isn’t completed in a specified time frame written into the contract are called:
Associated Answers
1 Reimbursement
2 Reparation
3 Deadline compensation
4 Liquidated damages

Answer 214

4 Liquidated damages

Question 215

Changes made to the contract documents after the signing of the basic owner-contractor agreement are called:
Associated Answers
1 Addenda
2 Modifications
3 Notary
4 Bulletins

Answer 215

2 Modifications

Question 216

Change orders are an example of contract modifications.
Associated Answers
1 true
2 false

Answer 216

1 true

Question 217

When one contractor assumes all design and construction responsibilities this contract is known as:
Associated Answers
1 Turn key
2 Design/Build
3 Fast Track
4 Single prime

Answer 217

2 Design/Build

Question 218

The most important thing for both the contractor and the owner to do before signing a contract is to read and understand the contract.
Associated Answers
1 true
2 false

Answer 218

1 true

Question 219

These are common contract terms that predetermine how important issues involved in a lawsuit will be addressed, such as attorney’s fees being recouped by the prevailing party in the lawsuit, or agreeing to arbitration as a method of resolving disputes.
Associated Answers
1 recitals
2 boilerplate provisions
3 rescissions
4 addenda

Answer 219

2 boilerplate provisions

Question 220

What type of contract provides the owner with the total price for the project in advance?
Associated Answers
1 Unit price
2 Lump sum
3 Best shot
4 Hard price

Answer 220

2 Lump sum

Question 221

)The contractor and the owner agree to set aside a sum of money for electrical fixtures and plumbing fixtures in the contract budget because the actual cost of these items are unknown. The set aside money is called:
Associated Answers
1 Escrow
2 Allowance
3 Allocation
4 All of the above

Answer 221

2 Allowance

Question 222

If the contract specifications require 5/8” OSB to sheath the roof and the contractor used 1/2” OSB to save money, the contractor could be sued for breach of contract.
Associated Answers
1 true
2 false

Answer 222

1 true

Question 223

If changes to the original contract occur, it is important to write a “Change Order” and have all parties on the contract sign it before the actual changes are made.
Associated Answers
1 true
2 false

Answer 223

1 true

Question 224

The first and most important element in a contract is offer and acceptance.
Associated Answers
1 true
2 false

Answer 224

1 true

Question 225

If a contractor finds a handwritten provision on a drawing, he should ignore it and proceed as it was originally directed by the original printed instruction.
Associated Answers
1 true
2 false

Answer 225

2 false

Question 226

Retainage is usually paid with the final payment.
Associated Answers
1 true
2 false

Answer 226

1 true

Question 227

The contract should provide for a schedule as to when progress payments will be disbursed and the amount of money that will be available to the contractor at each payment.
Associated Answers
1 true
2 false

Answer 227

1 true

Question 228

A ____________ is when the terms of the contract have been violated to the extent that the contract can no longer be valid.
Associated Answers
1 liquidation
2 material misrepresentation
3 material breach
4 immaterial breach

Answer 228

3 material breach

Question 229

You have a new roof and with the first heavy down pour of rain it’s leaking. There is no written warranty from the contractor, what type of warranty will require the contractor to correct the problem?
Associated Answers
1 limited warranty
2 special warranty
3 specific warranty
4 implied warranty

Answer 229

4 implied warranty

Notes: Just by the nature of the job itself there is an implied warranty. People reroof their roof so they won’t leak!

Question 230

A subcontract is a contract between the subcontractor and which of the following?
Associated Answers
1 the laborers
2 the material providers
3 the owner
4 the prime contractor

Answer 230

4 the prime contractor

Notes: Large projects will typically have one contractor who is contracting with the owner, which means it’s a prime contract. All other service providers then contract through the general contractor who is prime.

Question 231

Contractors use _______________ to modify the terms of an existing contract when changes are made. This insures that all the new work and the additional expenses will be covered in the contract.
Associated Answers
1 addenda
2 field orders
3 change orders
4 any of the above

Answer 231

3 change orders

Question 232

A home owner hires one contractor to be in charge of designing and building of the entire project. What is the name of this method of contracting?
Associated Answers
1 turnkey
2 design/build
3 fast-track
4 construction management

Answer 232

2 design/build

Question 233

If a contractor purchased the land, obtained the financing, designed and built the home for a client, what method of contracting would this represent?
Associated Answers
1 turnkey
2 design/build
3 fast-track
4 construction management

Answer 233

1 turnkey

Question 234

Contracts entered into that were initiated through a solicitation require the contractor to inform the customer of their right to cancel the contract within 3 days of the signing. The contract itself must have this information in at least _______ point font and in bold print.
Associated Answers
1 6
2 8
3 10
4 12

Answer 234

3 10

Question 235

Contracts signed at the contractor’s place of business do not qualify the customer to cancel the contract within 3 days.
Associated Answers
1 true
2 false

Answer 235

1 true

Question 236

Contractors who start a project initiated through a solicitation before the customer’s 3 day right to cancel, risk losing their wages, including the materials expended.
Associated Answers
1 true
2 false

Answer 236

1 true

Question 237

Which of the following is NOT a basic element of a contract?
Associated Answers
1 legal purpose
2 offer and acceptance
3 arbitration clause
4 consideration

Answer 237

3 arbitration clause

Question 238

The details of the contract regarding who, how, what, how much, how many, when, etc., are called its____________.
Associated Answers
1 provisions or terms
2 clauses
3 addenda
4 stipulations

Answer 238

1 provisions or terms

Question 239

This method of contracting allows for the project to begin before the project’s entire specifications have been decided upon.
Associated Answers
1 Construction Management
2 Design Build
3 Fast Track
4 Turnkey

Answer 239

3 Fast Track

Question 240

This method of contracting involves one contract that the owner enters into to build (but not design) the structure with a single contractor.
Associated Answers
1 Single Prime
2 Turnkey
3 Design-Build
4 Construction Management

Answer 240

1 Single Prime

Question 241

In this method of contracting, the owner contracts with a construction manager to schedule and manage construction tasks. The construction manager typically would receive a fee to manage the project from conception to completion.
Associated Answers
1 Turnkey
2 Design-Build
3 Construction Management
4 Fast Track

Answer 241

3 Construction Management

Question 242

_______ are miscellaneous changes in the contract that predetermine how important issues involved in a lawsuit will be addressed.
Associated Answers
1 Modifications
2 Boilerplate Provisions
3 Stipulations
4 none of the above

Answer 242

2 Boilerplate Provisions

Question 243

The term consideration means that both parties to a contract must be exchanging something of value.
Associated Answers
1 True
2 False

Answer 243

1 True

Question 244

Terms used in a contract that allow the owner to withhold an agreed upon percentage of the contract funds until the project is 100% complete is called:
Associated Answers
1 Withholding allowance
2 Retainage
3 Retainer
4 Escrow

Answer 244

2 Retainage

Question 245

A ____________ is when the terms of the contract have been violated to the extent that the contract can no longer be valid.
Associated Answers
1 Liquidation
2 Material Misrepresentation
3 Material Breach
4 Immaterial Breach

Answer 245

3 Material Breach

Question 246

Which of the following usually has a direct contract with the owner?
Associated Answers
1 Laborers
2 Material Providers
3 Owner
4 General Contractor

Answer 246

4 General Contractor

Question 247

Contractors use _______________ to modify the terms of an existing contract when changes are made. This insures that all the new work and the additional expenses will be covered in the contract.
Associated Answers
1 Addenda
2 Field Orders
3 Change Orders
4 Any of the above

Answer 247

3 Change Orders

Question 248

This method of contracting is preferred by owners who want to deal with one firm for the entire project. The firm they hire will complete the project from the early design stages to the final completion of the project.
Associated Answers
1 single prime contracting
2 design build contracting
3 construction management system
4 fast track construction

Answer 248

2 design build contracting

Question 249

A _________contract is very similar to the Design-Build, but the contractor also obtains the financing and the land.
Associated Answers
1 Fast Track
2 Single Prime
3 Unit Price
4 Turnkey

Answer 249

4 Turnkey

Question 250

Which of the following dispute resolution alternatives uses a neutral person to review and render a decision that is binding?
Associated Answers
1 Negotiation
2 Collaboration
3 Mediation
4 Arbitration

Answer 250

4 Arbitration

Question 251

The primary job of a project manager is to complete the project according to its specifications:
Associated Answers
1 Within budget
2 On Schedule
3 With the expected degree of quality
4 All of the above

Answer 251

4 All of the above

Question 252

The critical path schedule shows how the tasks on the schedule are inter-related.
Associated Answers
1 true
2 false

Answer 252

1 true

Question 253

By preparing a ________________ project managers will better understand the cash needed at the intervals that the monies will be disbursed.
Associated Answers
1 Preliminary cash flow schedule
2 budget
3 tracking schedule
4 none of the above

Answer 253

1 Preliminary cash flow schedule

Question 254

Quality of construction should be addressed in the specifications. Companies that are bidding can take these expectations into consideration when they are doing their estimates.
Associated Answers
1 true
2 false

Answer 254

1 true

Question 255

Adding __________time is a method of alotting more time in the project schedule to account for unforeseen delays.
Associated Answers
1 uncertainty
2 chance happening
3 contingency
4 extra

Answer 255

3 contingency

Question 256

A critical path schedule will be developed by the use of a calendar.
Associated Answers
1 true
2 false

Answer 256

2 false

Question 257

Project managers rely on information provided by ____________to effectively schedule their projects:
Associated Answers
1 subcontractors
2 records of similar past projects
3 expediters
4 both a & b

Answer 257

4 both a & b

Question 258

For a small construction company, who would typically be the project manager?
Associated Answers
1 prime contractor (general contractor)
2 superintendent
3 architects
4 none of the above

Answer 258

1 prime contractor (general contractor)

Question 259

In order to schedule time slots for all of the individual tasks involved in completing a project, first we need to identify each ______________.
Associated Answers
1 subcontractor
2 phase of the project
3 task
4 all of the above

Answer 259

3 task

Question 260

A major benefit of the critical path method of scheduling is it shows how one project task will be dependent on the completion of other tasks that come before it in a ________________.
Associated Answers
1 logical sequence
2 building project
3 orderly fashion
4 descending order

Answer 260

1 logical sequence

Question 261

This chart graphs the starting and finishing times for individual tasks that make up the project.
Associated Answers
1 bar chart
2 gantt chart
3 duration chart
4 either A or B

Answer 261

4 either A or B

Question 262

Contingency time is providing extra time in the schedule for unforeseen delays.
Associated Answers
1 true
2 false

Answer 262

1 true

Question 263

When using subcontractors, be sure to clearly describe the level of quality expected in their job specifications, this will help them _____ the job accordingly.
Associated Answers
1 bid
2 understand
3 plan
4 track

Answer 263

1 bid

Question 264

A permit to build a home could still be granted if the building department doesn’t receive the prints, plans and specifications.
Associated Answers
1 true
2 false

Answer 264

2 false

Notes: The building official is given the power to grant a permit when drawings are not necessary. But that would never include a project like building a house!

Question 265

The overall direction of the project is the responsibility of the _____________.
Associated Answers
1 project coordinator
2 home owner
3 financial advisor
4 project manager

Answer 265

4 project manager

Question 266

When two contracting firms unite their forces to construct a project it is called a:
Associated Answers
1 partnership
2 merger
3 conglomerate
4 joint venture

Answer 266

4 joint venture

Notes: Some states even require that joint ventures purchase an additional license.

Question 267

In a residential building project by a contractor, to whom is the building permit issued?
Associated Answers
1 home owner
2 general contractor
3 superintendent
4 any of the above

Answer 267

2 general contractor

Question 268

The _________ method is an analysis that provides a diagram that depicts the longest continuous sequence of activities in a project, determining the overall amount of time to complete a project.
Associated Answers
1 Bar Chart
2 Gantt Chart
3 Critical Path
4 Calendar Scheduling

Answer 268

3 Critical Path

Question 269

_____________ is a form of managing tasks that is best for simple, less complicated projects. It enables the contractor to link specific tasks to a date, manage deliveries, payments and employment schedules in a very simple, straightforward way.
Associated Answers
1 Gantt Charting
2 Critical Path method
3 Calendar scheduling
4 Queue Scheduling

Answer 269

3 Calendar scheduling

Question 270

The _________ is responsible for all work phases and coordination of work.
Associated Answers
1 contractor
2 superintendent
3 expediter
4 project manager

Answer 270

4 project manager

Question 271

Which is NOT true about project scheduling?
Associated Answers
1 A bad project schedule can result in contractors not knowing when to do their work.
2 Improper scheduling may increase total job time.
3 Project schedules are only required on major projects.
4 If a project schedule is too general or too detailed, it can be unusable.

Answer 271

3 Project schedules are only required on major projects.

Question 272

Quality of construction, materials and work methods should be addressed in the specifications. Companies that are bidding can take these expectations into consideration when they are doing their estimates.
Associated Answers
1 True
2 False

Answer 272

1 True

Question 273

Adding __________time is a method of allotting more time in the project schedule to account for unforeseen delays.
Associated Answers
1 Uncertainty
2 Chance Happening
3 Extra
4 Contingency

Answer 273

4 Contingency

Question 274

Project managers rely on information provided by ____________to effectively schedule their projects:
Associated Answers
1 Subcontractors
2 Records of similar past projects
3 Expediters
4 Both A and B

Answer 274

4 Both A and B

Question 275

When the project is nearing completion, a ________________is created during a walk through to determine any details that still need to be addressed in order to fully complete the project.
Associated Answers
1 Punch List
2 Job Sheet
3 Detail Survey
4 Final Report

Answer 275

1 Punch List

Question 276

)What are the steps involved in closing out each project?
Associated Answers
1 Onsite walk-through to develop a punch list
2 Contractor/architect provide certificate
3 Owner makes final payment
4 All of the above

Answer 276

4 All of the above

Question 277

)This chart graphs the starting and finishing times for individual tasks that make up the project.
Associated Answers
1 Bar Chart
2 Gantt Chart
3 Duration Chart
4 Either A or B

Answer 277

4 Either A or B

Question 278

In a construction project, _________ time is the amount of time that a task in a project network or path can be delayed without causing a delay to other, subsequent tasks or to the overall completion date.
Associated Answers
1 Contingency
2 Float
3 Duration
4 Flex

Answer 278

2 Float

Question 279

______________ is a procedure that analyzes the requirements of a project and determines how best to decrease costs, increase profits, improve quality and performance, and enhance customer satisfaction.
Associated Answers
1 Construction Analysis
2 Quality Assurance
3 Cost Coding
4 Value Engineering

Answer 279

4 Value Engineering

Question 280

Cash receipts, customer invoices and time cards are all examples of:
Associated Answers
1 Important records
2 Source Documents
3 Bookkeeping
4 Accounting

Answer 280

2 Source Documents

Question 281

Where is information from a business journal posted?
Associated Answers
1 General ledger
2 Log book
3 Financial statement
4 Balance sheet

Answer 281

1 General ledger

Question 282

)Which of the below choices is an example of a financial statement?
Associated Answers
1 Balance Sheet
2 Income Statement
3 Statement of Cash Flows
4 All of the above

Answer 282

4 All of the above

Question 283

If your company’s receipts exceed its disbursements your company has a negative cash flow.
Associated Answers
1 true
2 false

Answer 283

2 false

Question 284

An example of a fixed asset would be:
Associated Answers
1 cash
2 machinery
3 accounts receivable
4 prepaid expenses

Answer 284

2 machinery

Question 285

What would be an example of a fixed liability?
Associated Answers
1 electric bill
2 lumber package invoice
3 troublesome relative
4 mortgage on a company’s building

Answer 285

4 mortgage on a company’s building

Question 286

A company’s current assets are $100,000, and the total liabilities are $50,000. What is the net working capital of this company?
Associated Answers
1 $100,000
2 $50,000
3 $10,000
4 none of the above

Answer 286

2 $50,000

Question 287

This is the time required to purchase or manufacture a company’s inventory, sell the product, and collect the revenue.
Associated Answers
1 purchasing cycle
2 operating cycle
3 scheduling cycle
4 none of the above

Answer 287

2 operating cycle

Question 288

An income statement is sometimes called a:
Associated Answers
1 balance sheet
2 profit and loss statement
3 statement of cash flow
4 general ledger

Answer 288

2 profit and loss statement

Question 289

What financial statement will provide a company’s net worth?
Associated Answers
1 balance sheet
2 general ledger
3 assets and liabilities statement
4 net worth statement

Answer 289

1 balance sheet

Question 290

Which of the following methods of accounting is used to record income at the time it is earned?
Associated Answers
1 depreciation method
2 amortization method
3 cash method
4 accrual method

Answer 290

4 accrual method

Question 291

An example of a current asset is ___________ .
Associated Answers
1 cash
2 inventory
3 real estate
4 both a and b

Answer 291

4 both a and b

Question 292

__________ writes off the depreciable value of an asset at a uniform rate throughout its usable life.
Associated Answers
1 Accelerated depreciation
2 Uniform rate depreciation
3 Fixed depreciation
4 Straight-line depreciation

Answer 292

4 Straight-line depreciation

Question 293

Profitability ratios show the relationship between income or revenues versus investments and assets.
Associated Answers
1 true
2 false

Answer 293

1 true

Question 294

The process of allocating the cost of a tangible fixed asset over the asset’s useful life is called _____________ .
Associated Answers
1 appreciation
2 depreciation
3 accrual
4 none of the above

Answer 294

2 depreciation

Question 295

If a company has $37,525 in current assets and $12,672 in current liabilities, what is this company’s liquidity ratio?
Associated Answers
1 2.96
2 3.32
3 3.63
4 3.87

Answer 295

1 2.96

Notes: Current Assets divided by Current Liabilities = Liquidity Ratio

Question 296

If a company has debt totaling $128,000 and total assets of 463,250 what is this company’s debt ratio?
Associated Answers
1 .252
2 .265
3 .276
4 .31

Answer 296

3 .276

Notes: Total Debt divided by Total Assets = Debt Ratio

Question 297

If a company has current assets totaling $257,525 and an inventory value of $25,617 and current liabilities of $65,717, what is this company’s quick ratio?
Associated Answers
1 3.17
2 3.25
3 3.35
4 3.52

Answer 297

4 3.52

Notes: (Current Assets - Inventory) divided by Current Liabilities = Quick Ratio

Question 298

Last year our company produced revenues totaling $865,125 and we secured a net income of $265,463. What is our profitability ratio for last year?
Associated Answers
1 .306
2 .318
3 .32
4 .378

Answer 298

1 .306

Notes: Net Income divided by Revenues = Profitability Ratio

Question 299

The needed cash flow for a project should be provided for in the written terms of a contract to insure the needed monies are available to pay for expenses as the job progresses.
Associated Answers
1 true
2 false

Answer 299

1 true

Question 300

A financial statement that provides a summary of the company’s revenues and expenses over a given period of time is:
Associated Answers
1 balance sheet
2 income statement or profit and loss statement
3 statement of cash flows
4 any of the above

Answer 300

2 income statement or profit and loss statement

Question 301

A creditor’s claims on a company’s assets is called a___________.
Associated Answers
1 disbursement
2 cash flow
3 liabilitity
4 any of the above

Answer 301

3 liabilitity

Question 302

Workers Compensation is paid for by the employer, no monies are deducted from the employees pay check to help pay for this expense.
Associated Answers
1 true
2 false

Answer 302

1 true

Question 303

An invoice is received from a supplier dated June 1st in the amount of $4275.24, the payment terms are 5/10 EOM. How much does the contractor owe if the payment is made on June 8th?
Associated Answers
1 $4275.24
2 $3847.72
3 $4061.48
4 $4270.24

Answer 303

3 $4061.48

Notes: 5 percent discount if paid within 10 days of the invoice date or the total amount is due at the end of the month.

Question 304

The __________ method of accounting records income when services occur (at the time of invoicing the customer), and expenses are recorded at the time they are incurred ( when invoices are received).
Associated Answers
1 cash
2 accural
3 cash flow
4 posting

Answer 304

2 accural

Question 305

Of the two accounting methods below, which one is considered the better management tool?
Associated Answers
1 cash
2 accural

Answer 305

2 accural

Notes: This method provides a manager with a much clearer picture of a company’s financial situation.

Question 306

During a given accounting cycle a company collected $55,125 in accounts receivable and paid out $50,275 in expenses. This company has a negative cash flow.
Associated Answers
1 true
2 false

Answer 306

2 false

Question 307

Your balance sheet is used to describe the financial status of your business:
Associated Answers
1 as of a specific date
2 for the fiscal year
3 for the calander year
4 for a particular

Answer 307

1 as of a specific date

Question 308

The main purpose of budgeting is to:
Associated Answers
1 plan ahead for a project, or series of projects
2 find the lowest cost for labor and materials
3 prevent the checking account from becoming overdrawn
4 prepare an accurate financial statement

Answer 308

1 plan ahead for a project, or series of projects

Question 309

Which of these is not an asset?
Associated Answers
1 tools
2 inventory
3 accrued wages
4 prepaid expenses

Answer 309

3 accrued wages

Question 310

Where is information from a business journal posted?
Associated Answers
1 General ledger
2 Log book
3 Financial statement
4 Balance sheet

Answer 310

1 General ledger

Question 311

Which of the below choices is an example of a financial statement?
Associated Answers
1 Balance Sheet
2 Income Statement
3 Statement of Cash Flows
4 all of the above

Answer 311

4 all of the above

Question 312

An example of a fixed asset would be:
Associated Answers
1 cash
2 machinery
3 accounts receivable
4 prepaid expenses

Answer 312

2 machinery

Question 313

The formula for calculating working capital is:
Associated Answers
1 Assets minus liabilities
2 Assets divided by liabilities
3 Current assets minus current liabilities
4 Net income divided by revenues

Answer 313

3 Current assets minus current liabilities

Question 314

A company’s current assets are $100,000, and the total liabilities are $50,000. What is the net working capital of this company?
Associated Answers
1 $100,000
2 $50,000
3 $10,000
4 none of the above

Answer 314

2 $50,000

Question 315

Laborers’ salaries are typically direct cost.
Associated Answers
1 True
2 False

Answer 315

1 True

Question 316

Which of the following methods of accounting is used to record income at the time it is earned?
Associated Answers
1 depreciation method
2 amortization method
3 cash method
4 accrual method

Answer 316

4 accrual method

Question 317

What financial statement will provide a company’s net worth?
Associated Answers
1 balance sheet
2 general ledger
3 assets and liabilities statement
4 net worth statement

Answer 317

1 balance sheet

Question 318

Prompt Payment Law requires owners to pay contractors within ________ days of receiving the contractor’s written request if the conditions of the contract have been met by the contractor.
Associated Answers
1 10
2 20
3 30
4 60

Answer 318

3 30

Question 319

A system of recording and summarizing business and financial transactions is called _______________.
Associated Answers
1 Record-keeping
2 Tracking
3 Accounting
4 Economics

Answer 319

3 Accounting

Question 320

)A company’s cash, accounts receivable, inventory, notes receivable and prepaid expenses are examples of ______________________.
Associated Answers
1 Asset
2 Current Assets
3 Capital
4 Liability

Answer 320

2 Current Assets

Question 321

For general purposes, financial records should be kept for up to ________ years.
Associated Answers
1 2
2 3
3 5
4 7

Answer 321

4 7

Question 322

Notes payable, accounts payable, unpaid wages and taxes due are all examples of ___________________________.
Associated Answers
1 Accounting
2 Current Liabilities
3 Fixed Liabilities
4 Labor Burden

Answer 322

2 Current Liabilities

Question 323

Accounting is based on five basic account types:
Associated Answers
1 Assets, Liabilities, Income, Disbursements and Payroll
2 Assets, Liabilities, Equity, Income and Expenses
3 Income, Expenses, Revenues, Costs and Liabilities
4 Liquidity, Equity, Liabilities, Income and Capital

Answer 323

2 Assets, Liabilities, Equity, Income and Expenses

Question 324

)Many times a contract cannot be completed in one taxable year. the Tax Reform Act or 1986 allows you to use a different accounting method in order to estimate income. Which of the following are acceptable?
Associated Answers
1 Completed Contract Method
2 Percentage of Completion Method
3 Cost Comparison Method
4 All of the above

Answer 324

4 All of the above

Question 325

1/10 Net 30 means:
Associated Answers
1 1% discount if paid by the 10th day of the month after the purchases are shipped
2 1% discount if paid within 10 days; otherwise the entire amount is due within 30 days
3 Payment is due 10 days after receiving the invoice
4 Cash on Delivery

Answer 325

2 1% discount if paid within 10 days; otherwise the entire amount is due within 30 days

Question 326

What Federal Form do employers have new employees complete in order for the employer to determine the correct amount of federal income tax to withhold from the employee’s paycheck?
Associated Answers
1 W-2
2 W-4
3 1040
4 1065

Answer 326

2 W-4

Question 327

What is used by the federal government to identify the tax accounts of employers?
Associated Answers
1 EIN number
2 FILA number
3 FUTA number
4 None of the above

Answer 327

1 EIN number

Question 328

What federal act provides for the lawful deduction of an employee’s wages to pay for old age, survivors, disability and hospital insurance?
Associated Answers
1 Social Security Act
2 Federal Insurance Contributions Act (FICA)
3 Medicare Act
4 Retirement Act

Answer 328

2 Federal Insurance Contributions Act (FICA)

Question 329

Both employers and employees pay federal unemployment taxes.
Associated Answers
1 true
2 false

Answer 329

2 false

Question 330

What Federal tax form would a corporation file for annual return of income?
Associated Answers
1 1065
2 1040
3 1120
4 W-2

Answer 330

3 1120

Question 331

Federal law generally requires that sole proprietors, partners, and S-Corporations make estimated tax payments if they expect to owe at least _______ in taxes for the current year.
Associated Answers
1 $1,000
2 $1,500
3 $2,000
4 $5,000

Answer 331

1 $1,000

Question 332

You must pay self-employment taxes if your net earnings were ________ or more.
Associated Answers
1 $400
2 $500
3 $1,000
4 $1,500

Answer 332

1 $400

Question 333

)As an employer, you are responsible for filing which of the following employment taxes?
Associated Answers
1 federal unemployment tax
2 federal income tax
3 social security tax
4 all of the above

Answer 333

4 all of the above

Question 334

You must pay self employment tax by filing form 1040SE if your annual net earnings from self employment were ______ or more.
Associated Answers
1 $250
2 $400
3 $1000
4 $2500

Answer 334

2 $400

Question 335

Employers who report less than $2500 per quarter from monies collected from federal payroll taxes can use form _______ Quarterly Employers Tax Return.
Associated Answers
1 941
2 940
3 1040
4 SS-4

Answer 335

1 941

Question 336

What federal form is use to report “Employers Annual Federal Unemployment Tax Return”.
Associated Answers
1 940
2 941
3 965
4 1180

Answer 336

1 940

Question 337

Employers find the proper tax deductions for each employee based on the _______ form they filled out at the time they were hired.
Associated Answers
1 1099
2 W-2
3 W-4
4 I-9

Answer 337

3 W-4

Question 338

What IRS publication provides employers with tables providing the necessary information for appropriate federal tax deductions?
Associated Answers
1 Circular E
2 Form 1065
3 W-2
4 W-4

Answer 338

1 Circular E

Question 339

The only payroll taxes that both the employer and the employee contribute to equally are, Social Security and Medicare.
Associated Answers
1 true
2 false

Answer 339

1 true

Question 340

Workers Compensation is paid for by the employer, no monies are deducted from the employees pay check to help pay for this expense.
Associated Answers
1 true
2 false

Answer 340

1 true

Question 341

Of the choices below, which choice is paid for wholly by the employer?
Associated Answers
1 medicare
2 federal income tax
3 social security tax
4 unemployment

Answer 341

4 unemployment

Question 342

Federal law generally requires that sole proprietors, partners, and S-Corporations make estimated tax payments if they expect to owe at least ________ in taxes for the current year.
Associated Answers
1 $1000 or more
2 $1500 or more
3 $2000 or more
4 $2500 or more

Answer 342

1 $1000 or more

Question 343

What type of insurance will protect the contractor for losses due to a fire on his construction project?
Associated Answers
1 All Risk Builders insurance
2 General liability insurance
3 Professional liability insurance
4 None of the above

Answer 343

1 All Risk Builders insurance

Question 344

General liability insurance will protect the contractor against claims brought by third parties who are not employed by the contractor.
Associated Answers
1 true
2 false

Answer 344

1 true

Question 345

Who pays for workers’ compensation insurance?
Associated Answers
1 the employee
2 the employer
3 both the employee and employer
4 the federal government

Answer 345

2 the employer

Question 346

)A guarantee that a contractor will pay certain subcontractors, laborers, and material suppliers associated with the project would be known as a____________.
Associated Answers
1 bid bond
2 performance bond
3 payment bond
4 maintenance bond

Answer 346

3 payment bond

Question 347

Any monies paid out by a surety company will need to be paid back.
Associated Answers
1 true
2 false

Answer 347

1 true

Question 348

Equipment in transit, on the premises or at the job site, would typically be covered by:
Associated Answers
1 General liability policy
2 All risk building insurance
3 Equipment floater policy
4 None of the above

Answer 348

3 Equipment floater policy

Question 349

A Performance Bond guarantees that the contractor will complete the project according to the contract plans and terms.
Associated Answers
1 true
2 false

Answer 349

1 true

Question 350

The __________ requires that federal projects valued over $100,000 must produce a performance bond to guarantee completion of the project under the terms of the contract.
Associated Answers
1 Walsh Healy Act
2 Service Contract Act
3 Miller Act
4 None of the above

Answer 350

3 Miller Act

Question 351

Liability Insurance on employees provides coverage over and above worker’s compensation insurance in case of injury or death of an employee.
Associated Answers
1 true
2 false

Answer 351

1 true

Question 352

Prime contractors should verify that their subcontractors have secured their own insurance for general liability and workers compensation.
Associated Answers
1 true
2 false

Answer 352

1 true

Question 353

Can a prime contractor be held liable for a subcontractor whose employee is claiming workers compensation benefits if the subcontractor was uninsured?
Associated Answers
1 yes
2 no

Answer 353

1 yes

Question 354

Are the owners of a sole proprietorship required to purchase workers compensation insurance to cover themselves?
Associated Answers
1 yes
2 no

Answer 354

2 no

Question 355

Who is responsible to assume legal liabilities for construction accidents?
Associated Answers
1 the owner
2 the general contractor
3 the subcontractor
4 anyone who enters the construction area

Answer 355

2 the general contractor

Question 356

If an inspector is injured on the builder’s job site during his inspection, which of the following insurance policies would be applicable for coverage?
Associated Answers
1 Builders Risk
2 General Liability
3 Workers’ Compensation
4 none of the above

Answer 356

3 Workers’ Compensation

Question 357

What type of insurance covers a builder against theft of materials from a job site?
Associated Answers
1 liability
2 builder’s risk
3 workers’ compensation
4 homeowners

Answer 357

2 builder’s risk

Question 358

An employee intentionally injured himself on the job. What percent of workers’ compensation insurance can he collect?
Associated Answers
1 0%
2 10%
3 50%
4 100%

Answer 358

1 0%

Question 359

If a builder or one of his employees drops a hammer from the roof and injures a member of the public, what type of insurance covers the cost of the injury?
Associated Answers
1 injured persons health insurance
2 comprehensive commercial general liability insurance
3 workers’ compensation insurance
4 homeowners construction lien recovery fund

Answer 359

2 comprehensive commercial general liability insurance

Question 360

Builder’s risk insurance can be canceled by the:
Associated Answers
1 builder only
2 home owner
3 policy holder at any time
4 property owner

Answer 360

3 policy holder at any time

Question 361

A bond that insures that the activities on a construction project are the same as the intended activities for which the permit was granted is called a ______________ .
Associated Answers
1 Contract Surety Bond
2 Permit Bond
3 Surety Bond
4 Performance Bond

Answer 361

2 Permit Bond

Question 362

__________ is when the homeowner is accepting the risk related to the project, instead of the general contractor.
Associated Answers
1 Home owner insurance
2 Wrap-up Liability insurance
3 Key Man insurance
4 Personal Liability Insurance

Answer 362

2 Wrap-up Liability insurance

Question 363

Employers in Michigan are required to purchase workers compensation insurance for their employees when:
Associated Answers
1 one employee work 35 hours or more in the past 13 weeks
2 when they have 3 or more part-time employees
3 someone gets injured
4 both A and B are correct

Answer 363

4 both A and B are correct

Question 364

What benefits does workers compensation insurance provide to injured employees?
Associated Answers
1 2/3 wage replacement
2 medical treatment
3 rehabilitation benefits
4 all of the above

Answer 364

4 all of the above

Question 365

A contractor who does not have workers compensation insurance is at risk of being sued for the same benefits provided by workers compensation in the event of an employee injury.
Associated Answers
1 true
2 false

Answer 365

1 true

Question 366

)An employee returns to the work force after being rehabilitated but is no longer able to perform his previous skill. If he accepts a job at a lesser pay scale will workers compensation assist him financially?
Associated Answers
1 No
2 yes, up to 66.6 % of his previous earnings
3 yes, up to 75% of his previous earnings
4 yes, up to 80% of his previous earnings

Answer 366

4 yes, up to 80% of his previous earnings

Question 367

What is an insurance policy taken out to cover the financial loss that would arise from the death or extended incapacity of the member of the business specified on the policy.
Associated Answers
1 liability insurance
2 workers compensation insurance
3 key man insurance
4 any of the above

Answer 367

3 key man insurance

Question 368

What type of bond guarantees that the general contractor will pay the subcontractors, laborers and material suppliers associated with the project. It guarantees that the project will have no claims or liens placed against it.
Associated Answers
1 bid bond
2 performance bond
3 payment bond
4 any of the above

Answer 368

3 payment bond

Question 369

Which type of bond guarantees that the project will be completed according to the contract specifications?
Associated Answers
1 contract bond
2 performance bond
3 bid bond
4 subcontractor bond

Answer 369

2 performance bond

Question 370

General contractors may require their subcontractors to carry a subcontractor bond to insure that the subs are certain to pay their material bills on a given project.
Associated Answers
1 true
2 false

Answer 370

1 true

Question 371

Bonds provide protection in the event that contractual obligations are not met.
Associated Answers
1 true
2 false

Answer 371

1 true

Question 372

A self employed contractor with no employees is required under Michigan law to purchase workers compensation insurance.
Associated Answers
1 true
2 false

Answer 372

2 false

Question 373

Each _____________ , or laborer who supplies material or labor to improve a property, has a right to claim that debt owed to him by filing a lien against the property improved.
Associated Answers
1 contractor
2 subcontractor
3 supplier
4 all of the above

Answer 373

4 all of the above

Question 374

An owner shall provide a complete ______________ to a contractor, subcontractor, supplier or laborer who has requested it.
Associated Answers
1 Notice of Furnishing
2 Letter of Authority
3 Notice of Commencement
4 Formal Contract

Answer 374

3 Notice of Commencement

Question 375

Subcontractors and suppliers must provide a Notice of Furnishing either personally or by certified mail within ______ after first furnishing materials.
Associated Answers
1 7 days
2 10 days
3 20 days
4 30 days

Answer 375

3 20 days

Question 376

A contractor must provide a Sworn Statement when ___________.
Associated Answers
1 payment is due
2 when the contractor requests payment
3 when an owner demands ot see it
4 all of the above

Answer 376

4 all of the above

Question 377

Contractors are required to list materials or cost of materials that are provided in their own inventories on the Sworn Statement.
Associated Answers
1 True
2 False

Answer 377

2 False

Question 378

A claim of lien by a subcontractor, supplier or laborer shall have attached to it a ______________of a Notice of Furnishing.
Associated Answers
1 Notice of Commencement
2 Letter of Authority
3 Proof of Service
4 Formal Contract

Answer 378

3 Proof of Service

Question 379

If an unlicensed contractor files a lien, the unlicensed contractor is liable for ______________ .
Associated Answers
1 All costs incurred by initiating the action, including actual costs and attorney fees.
2 All costs incurred by initiating the action, except actual costs and attorney fees.
3 All damages that result from the action.
4 Only the court and attorney fees

Answer 379

1 All costs incurred by initiating the action, including actual costs and attorney fees.

Question 380

A contract may require in its conditions that a right to a lien is waived or relinquished before any improvement is made.
Associated Answers
1 True
2 False

Answer 380

2 False

Question 381

A ________________ is used when a contractor is going to be collecting more funds as the job progresses, but is releasing his lien right to the extent of money owed to this point. (The actual payment has been made.)
Associated Answers
1 Full Unconditional Waiver
2 Full Conditional Waiver
3 Partial Unconditional Waiver
4 Partial Conditional Waiver

Answer 381

3 Partial Unconditional Waiver

Question 382

A conditional waiver states that the contractor or supplier will not file a lien if they are paid the amount provided on the waiver.
Associated Answers
1 True
2 False

Answer 382

1 True

Question 383

Waivers that are “______” means that no further claim is expected upon this property.
Associated Answers
1 complete
2 full
3 empty
4 open

Answer 383

2 full

Question 384

Court procedings to enforce a construction lien must be held within __________ of the date the lien was recorded.;
Associated Answers
1 90 days
2 6 months
3 1 year
4 18 months

Answer 384

3 1 year

Question 385

If an owner has paid for work done, and the contractor has diverted that money elsewhere, the claim of lien does not attach to the residential structure to the extent of what the owner has already paid out.
Associated Answers
1 True
2 False

Answer 385

1 True

Question 386

In order for foreclosure, the judge can give the defendant a time limit to pay as ordered, not to exceed _________.
Associated Answers
1 30 days
2 90 days
3 4 months
4 6 months

Answer 386

3 4 months

Question 387

To bring a construction lien against a condo, the contract must have been with a developer or owner.
Associated Answers
1 True
2 False

Answer 387

1 True

Question 388

Are MIOSHA inspectors permitted to conduct an inspection without advanced warning to the employer?

Associated Answers
1 Yes
2 No

Answer 388

1 Yes

Question 389

If an injury only requires first aid, would that incident need to be recorded?
Associated Answers
1 No
2 Yes

Answer 389

1 No

Question 390

The purpose of a/an _________ is to provide detailed information on each hazardous chemical at the job site, informing employees of potential dangers.
Associated Answers
1 SDS (Safety Data Sheets)
2 OR-OSHA 300A
3 Injury Prevention Committee
4 Environmental Control Plan

Answer 390

1 SDS (Safety Data Sheets)

Question 391

Which is NOT an employer’s right regarding an MIOSHA inspections?

Associated Answers
1 To attend or refuse to attend the opening and closing conferences.
2 To correct violations during the inspections.
3 To be notified before the inspection to prepare for the inspection.
4 To protect trade secrets.

Answer 391

3 To be notified before the inspection to prepare for the inspection.

Question 392

What information about hazardous chemicals is NOT found on an SDS?
Associated Answers
1 Chemical characteristics.
2 The potential for fire and explosion.
3 Medical conditions that are often aggravated by exposure.
4 Effective and ineffective protective measures.

Answer 392

4 Effective and ineffective protective measures.

Question 393

A MIOSHA compliance officer would be most likely to check which of the following:

Associated Answers
1 whether the building permit is accurate and up to date
2 whether tennis shoes are being worn by the workers
3 if the builder is in compliance with the minimum wage law
4 all of the above

Answer 393

2 whether tennis shoes are being worn by the workers

Question 394

Does an employer have the right to correct violations during an MIOSHA inspection, hoping to lessen the penalty?

Associated Answers
1 Yes
2 No

Answer 394

1 Yes

Question 395

Companies with fewer than 10 employees are not required to prepare a written hazard communication program, even though hazardous chemicals are being used.
Associated Answers
1 False
2 True

Answer 395

1 False

Question 396

The duties of the DEQ include which of the following?
Associated Answers
1 issuing permits
2 conducting inspections
3 enforcing environmental laws
4 all of the above

Answer 396

4 all of the above

Question 397

Employers must post OSHA posters in a conspicuous place.
Associated Answers
1 True
2 False

Answer 397

1 True

Question 398

MIOSHA on-site consultation services include which of the following?

Associated Answers
1 walk-through surveys
2 training
3 abatement advice
4 a and b
5 all of the above

Answer 398

5 all of the above

Question 399

________ are responsible for ensuring the use of personal protective equipment such as hard hats, hearing protection and eye and face protection.
Associated Answers
1 Employees
2 OSHA officials
3 Employers
4 Competent Persons

Answer 399

3 Employers

Question 400

Employers are required to post OSHA Form _______ (Summary of Work-Related Injuries and Illnesses) in a conspicuous spot.
Associated Answers
1 300
2 301
3 300A
4 301A

Answer 400

3 300A

Question 401

MIOSHA records must be kept by the employer for at least ____ years following the year to which they pertain. Exposure and medical records must be kept for_____ years.

Associated Answers
1 3 and 7
2 5 and 15
3 5 and 30
4 3 and 30

Answer 401

3 5 and 30

Question 402

These are violations committed with an intentional disregard of, or plain indifference to the requirement of the MIOSHA regulations. The initial penalty is a minimum of $5,000 and a maximum of $70,000.

Associated Answers
1 Repeat
2 Serious
3 Ongoing
4 Willful

Answer 402

4 Willful

Question 403

Employers are required to report any new hires or rehires within ______ days of the date of employment.
Associated Answers
1 5
2 7
3 15
4 30

Answer 403

3 15

Question 404

The purpose of the ___________is to aid in the economic, social and educational development of young people through employment.
Associated Answers
1 Davis-Bacon Act
2 Child Labor Law
3 Family Medical Leave Act
4 New Hire Reporting Law

Answer 404

2 Child Labor Law

Question 405

The minimum working age for a young person is _____ .
Associated Answers
1 12
2 14
3 16
4 17

Answer 405

2 14

Question 406

The ____________ establishes minimum wage and overtime compensation standards.
Associated Answers
1 Davis-Bacon Act
2 Service Contract Act
3 Wage Garnishment Law
4 Fair Labor Standards Act

Answer 406

4 Fair Labor Standards Act

Question 407

The purpose of the ______ is to document that each new employee (both citizen and non-citizen) hired after November 6, 1986 is authorized to work in the United States.
Associated Answers
1 I-9 form
2 W-2 form
3 W-4 form
4 1040 EZ form

Answer 407

1 I-9 form

Question 408

Employers must retain completed Forms I-9 for _______ years after the date of hire.
Associated Answers
1 1
2 2
3 3
4 4

Answer 408

3 3

Question 409

The Americans with Disabilities Act applies to employers with ____ or more employees.
Associated Answers
1 7
2 11
3 12
4 15

Answer 409

4 15

Question 410

Under the Americans with Disabilities Act, employers cannot require an applicant to take a medical exam prior to making a job offer, but can ask an applicant to demonstrate how the applicant will perform a job related function.
Associated Answers
1 True
2 False

Answer 410

1 True

Question 411

The ____________ prohibits firing an employee whose pay is garnished for payment of a single debt.
Associated Answers
1 Contract Work Hours and Safety Standards Act
2 Wage Garnishment Law
3 Walsh-Healey Public Contracts Act
4 Service Contract Act

Answer 411

2 Wage Garnishment Law

Question 412

This act entitles eligible employees of covered employers to take up to 12 weeks of unpaid job-protected leave each year.
Associated Answers
1 Family and Medical Leave Act
2 Contract Work Hours and Safety Standards Act
3 Service Contract Act
4 Walsh-Healey Public Contracts Act

Answer 412

1 Family and Medical Leave Act

Question 413

The Family and Medical Leave Act guarantees health insurance will continue if leave is taken for which of the following reasons:
Associated Answers
1 Care of a child, spouse or parent with a serious health condition
2 For the birth and care of children
3 Placement of a child for adoption or foster care
4 all of the above

Answer 413

4 all of the above

Question 414

Is it prohibited for a 16 year old to do roofing, excavation, or demolition work?
Associated Answers
1 Yes
2 No

Answer 414

1 Yes

Question 415

)The ____________ requires payment of prevailing wage rates and fringe benefits on federally financed or federally assisted CONSTRUCTION.
Associated Answers
1 Fair Labor Standards Act
2 Walsh Healy Contracts Act
3 Davis-Bacon Act
4 Service Contract Act

Answer 415

3 Davis-Bacon Act

Question 416

COBRA gives “qualified beneficiaries” the right to maintain, at their own expense, coverage under their health plan that would be lost due to a “qualifying event” at a cost comparable to what it would be if they were still members of the employer’s group.
Associated Answers
1 True
2 False

Answer 416

1 True

Question 417

HIPAA provides for improved portability and continuity of health insurance coverage but does NOT protect an employee’s right to privacy concerning their health information.
Associated Answers
1 True
2 False

Answer 417

2 False

Question 418

To be legally valid, a contract has to provide these items: mutual understanding, an offer to provide or perform work, acceptance signed and dated, and consideration. What is meant by consideration?
Associated Answers
1 Each party must be very careful to understand the specifics of the agreement.
2 The exchange of something of value as a show of good faith, such as money.
3 Each party must be considerate to each other.
4 None of the above.

Answer 418

2 The exchange of something of value as a show of good faith, such as money.

Question 419

Most contracts would forbid the owner or contractor from assigning their obligations without the consent of the other party.
Associated Answers
1 true
2 false

Answer 419

1 true

Question 420

)If a company has Current Assets of $115,000, Fixed Assets of $257,250, Current Liabilities of $27,350 and Fixed Liabilities of $187,258, what is its Liquidity Ratio?
Associated Answers
1 3.6 to 1
2 3.9 to 1
3 4.2 to 1
4 4.8 to 1

Answer 420

3 4.2 to 1

Question 421

A project has an estimated labor cost of $162,500 and an estimated material cost of $225,100, project overhead is estimated at 5% of both labor and material cost and assigned company overhead of 1.5% of material cost. If the contract is written for $425,000, what profit margin is the contractor expecting to make?
Associated Answers
1 3.44%
2 4.95%
3 6.25%
4 7.3%

Answer 421

1 3.44%

Question 422

Using the accrual accounting method, a contractor completes $12,500 worth of services in June. He collects $8,500 in accounts receivable in June. How much income will the contractor recognize in June?
Associated Answers
1 $8,500
2 $21,000
3 $12,500
4 $4,000

Answer 422

3 $12,500