Test 1 Flashcards
What type of contract can a consumer cancel?
A home solicitation contract that involves carpentry, fencing, texture coating and burglar alarms
What statement is true regarding Surety Bonds?
In order to obtain a contractor’s license a surety bond is required
What individuals would be required to obtain a contractor’s license?
The fire alarm guy…
If a person wants to qualify for more than one active license at a time, they must own at least BLANK of the equity for each business where they serve as the qualifying individual.
20%
The Notice To Owner must be included where by the contractor?
On all home improvement projects over $500
Who will be least effected by the Notice To Owner?
The lender
When a customer has a contract with a contractor to build a home, when does the licensed contractor have lien rights?
Automatically
On a private home construction job and a Stop Notice is given on the home to the lender, what should the bond amount be?
1 1/4 times the amount of the actual claim
How could a cash flow problem best be prevented?
Every payment should relate to a definite stage of the project.
What must a contractor display on both sides of their commercial vehicles?
The name, business address, and license number
What is the maximum penalty for a contractor that is convicted of price gauging during a declared state of emergency?
- Permanent license revocation
- $10,000 fine
- 2 year in jail
At month end, data is posted from the bookkeeping journals to the:
General Ledger
What is the minimum length of time that a contract should keep a building report in the files?
5 years
Which of the following represents a current asset?
Retentions
What is a fixed asset?
Assets that will not be sold for at least one year
Why is net worth so important on a balance sheet?
Net worth represents the amount of money the owner has invested as well as the profits the company has retained. It also tells how much of the company’s assets belong to the owner.
When a figure is entered by mistake as an asset instead of a liability on the balance sheet, which one of the following results?
This means the error will be twice as large
Select an item that is a direct cost?
Payroll taxes…
What is direct labor comprised of?
The actual cost of labor payroll (NOT TAXES)
When a contractor is preparing to bid a job, what is the average overhead?
25%
Depreciation is shown where on the balance sheet?
In the fixed asset section
What is not a recommended billing practice?
If the customer has good credit, encourage time payments
The most likely reason that a subcontractor would serve the owner with a stop notice, would be?
To inform the owner that a sub has not been paid by the prime
