NASCLA Contractor's Guide: Multiple Choice Questions and Answers, Exams of Law

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NASCLA Contractor's Guide questions with

correct answers

1. FOB freight prepaid requires __________ to pay for shipping charges. A. Contractor B. Buyer C. Seller D. Subcontractor CORRECT ANSWER Seller
2. Which of the following is not a member of the supervisory? A. Foreman B. materials expediter C. Owner's representative D. Project manager CORRECT ANSWER Project Manager

3. __________ scheduling consists of dates, delivery dates, payment schedule and vacations. It is a simplified method. A. Calendar B. Bar chart C. Gantt CORRECT ANSWER Calendar
4. When working in dwelling that was built prior to 1978, the employer is to provide each occupant with a pamphlet ____________titled. A. Protect your family from lead in your home B. Protect your loved ones from lead in your home C. Protect your family and your friends from lead in your home

D. Pamphlets are not required CORRECT ANSWER Protect your family from lead in your home

5. Who pays into a worker's unemployment compensation? A. Property owner B. Building contractor C. Employer D. Employee CORRECT ANSWER Employer
6. A lump sum contract on a project has a total contact price of $260,000. Retainage has been held back at 10%. The contractor has received progress payments for 75% of the project. The contractor submits a request for final payment should be for?

A. More than $80, B. Less than $50, C. Between $50,001 and $60, D. Between $60,001 and $70,000 CORRECT ANSWER More than $80,

7. Which of the flowing is not a key characteristic of a sole proprietorship? A. termination at death of the owner B. Business expenses and personal income are not separated C. Taxed as ordinary income D. Must bear all responsibility CORRECT ANSWER Business expenses and personal income are not separated
8. What is the quick ratio (or acid test ratio) for a company that

has current assets of $28,000, inventory of $4,000, and current liabilities of $6,000? A. 4/ B. 1/ C. 7/ D. 1/7 CORRECT ANSWER 4/

9. An EAP (Employee Assistance Program) is required to be in writing for ________employees or more. A. 2 B. 8 C. 10 D. 11 CORRECT ANSWER 11

10. Who pays into FUTA (Federal Unemployment Tax Act)? A. Property owner B. Building contractor C. Employer D. Employee CORRECT ANSWER Employer
11. What is the purpose of just-in- time deliveries? A. Profit low and vandalism high B. Profit low and vandalism C. Profit high and vandalism high D. Profit high and vandalism CORRECT ANSWER Profit high and vandalism
12. Ethics has to do with all but which of the following?

A. Showing up to the job on time B. Do what you say you are going to do C. Doing the right thing D. Lying to the customer CORRECT ANSWER Lying to the customer

13. Which of the following is not a reward for owning an entrepreneurship? A. Flexibility of time B. making decisions C. Being your own boss D. managing cash flow CORRECT ANSWER Managing Cash Flow
14. Which of the following is not covered under the ADA? A. AIDS

B. Drug addition C. Alcohol addiction D. Paper cut CORRECT ANSWER Paper Cut

15. A job is estimated to cost $ million. However, two companies have a cap of $500,000. They can legally do this job if they ___________. A. Dissolve B. Become venture capitalist C. Joint venture D. It is an illegal activity CORRECT ANSWER Joint Venture
16. The standard markup in the construction industry is?

A. 10%

B. 15%

C. 18%

D. 11% CORRECT ANSWER 15%

17. Which is not an advantage of a partnership? A. Formation is easily done B. Multiple decision makers C. Direct profit rewards D. Larger management base CORRECT ANSWER Multiple decision makers
18. _______ prohibits firing due to taking of property. A. Wage Garnishment Law B. Service contact act

C. Walsh-Healy Act D. Davis-Bacon Act CORRECT ANSWER Wage Garnishment Law

19. The maximum number of shareholders permitted within an S corporation is? A. 25 B. 55 C. 70 D. 100 CORRECT ANSWER 100
20. An employee is generally subject to business instructions about all except which of the following? A. When B. Where

C. How D. Right to control CORRECT ANSWER Right to control

21. Delegating provides for all but the following? A. Concentrate strategically B. Developing employees C. I can do it all D. Accomplish tasks CORRECT ANSWER I can do it all
22. The most important aspect of a contract is _____________. A. Signature B. Consideration C. Date

D. Understanding CORRECT ANSWER Understanding

23. A ___________ is used when an owner contracts with one company to complete the construction process from the start to finish and purchase land. A. Single prime B. Design/build C. Turnkey D. Fast-track CORRECT ANSWER Turnkey
24. If the contract is ambiguous, the interpretation will go against whom? A. The party who accepted the contact B. The party who wrote the

contact C. The owner D. The contractor CORRECT ANSWER The party who wrote the contract

25. Who determines progress/final payments? A. Architect B. Inspector C. Lawyer D. Accountant CORRECT ANSWER Architect
26. The construction industry Payment protection Act of 1999 states ___________. A. Payment bond protections are void before work begins B. payment bond protections are

permitted before work begin C. The payment bond can be less that a performance bond D. Subcontractors are not required to notify contractors with an intent to sue CORRECT ANSWER Payment bond protections are void before work begins

27. What is the total project overhead for a project that last 4 months and has the following costs? Labor is $5,000; materials are $10,000; equipment rentals are $2,000; superintendent's annual salary is $40,000; office rent is $ per month; and office utilities are $400 per month. A. Between $12,000 and $16, B. Less than $12, C. Between $16, 000 and $20,

D. More than $20,000 CORRECT ANSWER 40,000/12 = 3333.33 x 4 months Between $12,000 and $16,

28. Exempt Forms W-4 expire on____________. A. February 15 B. February 16 C. April 30 D. December 1 CORRECT ANSWER February 16
29. Which of the following enterprises are double taxed? A. 1 Exam Prep, Inc B. ABC Construction, DBA C. Construction Done Right, LLC

D. XYZ Contractor, LP CORRECT ANSWER 1 Exam Prep, Inc

30. Which of the following is not considered as an acceptance to a contract? A. Signature B. Consideration C. Date D. Counter offer CORRECT ANSWER Counter Offer
31. A ____________ is a special business arrangement that exists when two or more companies join to undertake a specific project. A. Joint venture B. C corporation

C. LLC

D. GP CORRECT ANSWER Joint Venture

32. The Family and Medical Leave Act does not allow for which of the following? A. Maintenance of group health insurance B. 12 weeks unpaid C. Adopt a child D. Care for first cousin CORRECT ANSWER Care for a first cousin
33. To determine how much to withhold in taxes from an employee, the employer is to use the employee's _____________. A. W- B. W- C. W-

D. W-5 CORRECT ANSWER W-

34. A contractor pays a workers' compensation rate of $0. per $100 of office employee payroll, $2.00 per $100 of field supervisor payroll, and $0.36 per $100 of field employee payroll. Total office employee payroll for the year is $35,000. Total field supervisor payroll is $58,000. Total field employee payroll $325,000. The contractor receives a discount of 5% of total premiums for having a safety program in place. The total workers' compensation for the year is? A. Less than $1,300. B. Between $1,300.00 and $1,700.

C. Between $1,700.00 and $1,900. D. More than $2,000.00 CORRECT ANSWER More than $2,000,

35. Which of the following does not apply to a C corporation? A. Transfer of ownership through sale of stock B. Limited life of the business C. Separate legal entity D. Availability of capital resources CORRECT ANSWER Limited life of the business
36. Which of the following are permitted to be asked of a potential employee? A. Family members

B. Pregnancy concerns C. Hours available D. Sexual preference CORRECT ANSWER Hours available

37. If D & K Construction wanted to limit their liabilities, they should become a(n) _______. A. DBA B. C corporation C. LLC D. GP CORRECT ANSWER C Corporation
38. For federal taxes, a sole proprietor is to use self- employment tax form __________. A. 1040 & Schedule SC

B. 1040 & Schedule C C. 1040 - ES D. 940 - EZ CORRECT ANSWER 1040 & Schedule SC

39. The ________________ method recognizes income when the employer has received it. A. Appreciation B. Cash C. Accrual D. Depreciation CORRECT ANSWER Cash
40. Whose responsibility is it to understand OSHA? A. Property owner B. Building contractor

C. Employer D. Employee CORRECT ANSWER Employer

41. Which of the following insurances will protect an organization's officers? A. AO B. CFO C. DO D. CEO CORRECT ANSWER DO ( Director's Officers)
42. What percentage of a UST's combined volume must be underground? A. 10 B. 15 C. 20

D. 5 CORRECT ANSWER 10%

43. Which of the following bonds guarantees that the contractor will complete the project? A. Bid bond B. Payment bond C. Performance bond D. Completion bond CORRECT ANSWER Performance Bond
44. The MSDS (Materials Data Safety Sheets) provides for two main purposes; one purpose is product information, the other purpose is __________ information. A. Emergency contact

B. Sequence of activities C. Chemical D. Substance CORRECT ANSWER Chemical

45. Unemployment insurance is for employees who have been ____________. A. Laid off B. Fired C. On a paid vacation D. Injured at the construction site CORRECT ANSWER Laid Off
46. The ____method recognizes income when the employer has received it. A. Appreciation

B. Cash C. Accrual D. Depreciation CORRECT ANSWER Cash

47. Which of the following is not one of the key elements of a contract? A. Offer B. Acceptance C. Counter offer D. Consideration CORRECT ANSWER Counter Offer
48. Which of the following is not a key characteristic of a partnership? A. May be orally committed B. Keep separate bank accounts