WV BUSINESS LAW PRACTICE EXAM FOR CONTRACTORS questions with correct answers, Exams of Advanced Education

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WV BUSINESS LAW PRACTICE EXAM FOR

CONTRACTORS questions with correct answers

1. What type of contract requires the contractor to be responsible for both the engineering and construction of a project? a. Traditional b. Design build c. Turn key d. Concession CORRECT ANSWER b. Design build
2. By what date is an employer required to provide its employees with a W-2? a. January 31 b. February 15 c. March 31 d. April 15 CORRECT ANSWER a. January 31
3. When developing a project schedule, what does WBS stand for? a. Work breakdown structure b. Work building schedule c. Wall board system d. Whole build system CORRECT ANSWER a. Work breakdown structure
4. Overtime wages are paid at what percentage of the normal wage rate? CORRECT ANSWER c. 150%

5. Using the percentage method of withholding, what is the income tax deducted form an employees wages that earns $1,500 per pay period, is paid bi-weekly, is single and claims no deductions? a. $82. b. 165. c. $194. d. $214.50 CORRECT ANSWER c. $194.
6. What is the penalty for submitting an IRS payroll tax deposit in the amount of $5,000 that is 2 days late? a. $ b. $ c. $ d. $750 CORRECT ANSWER a. $ The accounting method that recognizes income and expenses only when money is received or paid is called: a. the PCM Method b. the Accrual method c. the cash method d. the cost-comparison method CORRECT ANSWER c. the Cash method Employers are required to notify employees of changes in policies affecting all the following EXCEPT: a. pay schedules b vacation allowance c. health benefits

d. promotion opportunities CORRECT ANSWER d. promotion opportunities What is the process for obtaining a contractor license if the existing license has lapsed? (Do not consider exceptions) a. Submit a renewal application with the renewal fee. b. Submit a renewal application, renewal fee and a $25 late fee. c. Submit a new license application using test scores from original license. d. Submit a new license application and retake licensing exams. CORRECT ANSWER d. Submit a new license application and retake licensing exams. What does the term "replacement cost" mean relative to insurance coverage? a. The insurer will pay the policy holder an amount sufficient to cover the acquisition of the same tool at today's prices. b. The insurer will pay the policy holder an amount equial to the depreciated value of the tool. c. The insurer will pay the policy holder an amount sufficient to cover the acquisition of a newer model tool at today's prices. d. The insurer will pay the policy holder an amount equal to a negotiated rate for value of a generic tool. CORRECT ANSWER a. The insurer will pay the policy holder an amount sufficient to cover the acquisition of the same tool at today's prices. All construction projects in West Virginia require a written contract when the total value of the contract EXCEEDS: a. $1, b. $2, c. $10, d. $25,000 CORRECT ANSWER c. $10,

When estimating the amount of time a task will take to complete, all the following elements should be considered EXCEPT: a. production time b. estimating time c. setup time d. contingency time CORRECT ANSWER b. estimating time How long are employers required to maintain reportable accident or incident records? a. 4 years b. 5 years c. 6 years d. 7 years CORRECT ANSWER b. 5 years Which of the following would be considered a current liability? a. Payroll b. Building lease c. Equipment loan d. Stock CORRECT ANSWER a. Payroll A business pays its employees every two weeks. During the first week of the pay period, the employee works 30 hours. During the second week the employee works 50 hours. The employee is paid $10 per hour. What are the gross wages of the employee for the pay period? a. $ b. $

c. $ d. $1200 CORRECT ANSWER b. $ On a balance sheet, the term "current" means what? a. One week or less b. One month or less c. One year or less d. Two years or less CORRECT ANSWER c. One year or less Which of the following contractor licenses are EXEMPT from wage bond requirements even if they have been providing services in West Virginia for less than five (5) years? a. Commercial Contractors b. Residential Contractors c. Electrical Contractors d. Plumbing Contractors CORRECT ANSWER b. Residential Contractors When referring to contracts, what does the term "consideration" mean? a. Compensation b. Agreement c. Offer d. Pondering CORRECT ANSWER a. Compensation All the following would be considered workplace injuries EXCEPT: a. when an employee is struck by falling debris at the jobsite before he clocks in for the day

b. when an employee is struck by a car while in the company parking lot while walking to the jobsite c. when an employee cleaning the company parking lot is struck by a car d. when an employee suffers burns related to jobsite chemicals CORRECT ANSWER b. when an employee is struck by a car while in the company parking lot while walking to the jobsite Which of the following bonds would be used to protect the owner from subcontractors, suppliers or laborers that were NOT compensated by the contractor? a. Bid bond b. Performance bond c. Payment bond d. Maintenance bond CORRECT ANSWER c. Payment bond What is the name of the process whereby an estimate is created containing all the materials required for a project? a. Job analysis b. Takeoff c. WBS d. Cost log CORRECT ANSWER b. Takeoff A price estimate for performing a job has been compiled and total costs of the project are $775,000. What will be the total bid of the company requires a 23% MARKUP on all costs of the project? a. $178, b. $630, c. $953,

d. $1,006,494 CORRECT ANSWER c. $953, Which worker is NOT entitled to receive overtime wages? a. Vice President b. Job foreman c. Laborer d. Temporary worker CORRECT ANSWER a. Vice President A contractor is issued a contractor license on May 1. When will the contractor license expire? a. April 30 each year b. June 30 each year c. July 1 each year d. December 31 each year CORRECT ANSWER a. April 30 each year What type of contract requires the builder to finance, initially own and operate the project, and then finally transfer the project to the customer after it has recovered its construction costs? a. Traditional b. Design Build c. Turn Key d. Concession CORRECT ANSWER d. Concession How many hours can an employee work during a work week without being paid overtime wages? a. 32 b. 40

c. 48 d. 56 CORRECT ANSWER b. 40 Which of the following statements is TRUE regarding a business general partnership? a. Partnerships are difficult to organize and complicated to maintain. b. All general partners are fully responsible for the business actions of the other general partners. c. All proceeds from the business are taxed first at the company level, then passed down to the individual partners. d. Partnerships required that all proceeds from the business be divided equally among partners. CORRECT ANSWER b. All general partners are fully responsible for the business actions of the other general partners. Which of the following contract documents would be seen as having more priority in a contract dispute than the other documents? a. General conditions b. Technical specifications c. Addendum d. Change order CORRECT ANSWER d. Change order If multiple liens are filed against the property owner on the same day, which lien holder has priority? a. The subcontractor that completed its work on March 31 b. The supplier that provided its building materials on April 15 c. The laborer that completed its work on April 22 d. The contractor that completed the project on May 1 CORRECT ANSWER b. The supplier that provided its building materials on April 15

Which of the following statements is TRUE regarding a Limited Liability Company (LLC)? a. The owners are responsible for self-employment tax on all business proceeds earned form the business. b. The company is limited to maximum of 100 members (shareholders). c. All company members (shareholders) are required to be U.S. Citizens. d. All members are completely liable for debts and actions of the company. CORRECT ANSWER a. The owners are responsible for self-employment tax on all business proceeds earned form the business. Where must liens be field in order to be properly recorded? a. Federal court b. State court c. County court d. City court CORRECT ANSWER c. County court Which of the following best describes the tern "double-taxation"? a. The company pays taxes on its income, then distributes dividends to shareholders which are taxed at the personal level. b. The business owner pays federal taxes on a salary, then pays taxes on the remaining income for the business. c. A business pays Federal tax based on business income, and pays State tax based on business income. d. A corporation pays sales tax on property sold to owners, and pays income tax on business operations. CORRECT ANSWER a. The company pays taxes on its income, then distributes dividends to shareholders which are taxed at the personal level.

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A.--..D......G..........Closeout ] ] ------C-----F--------------- Which of the following is the critical path leading to closeout? a. A,B,E b. A,D,G c. A,C,F d. A,B,C,D,E,F,g CORRECT ANSWER a. A,B,E ].......B------E-------------- ] ] ) A.--..D......G..........Closeout ] ] ------C-----F--------------- If task D takes 2 more days to complete than originally schedule, how much will the entire project be delayed? a. 0 days b. 1 day c. 2 days d. 3 days CORRECT ANSWER a. 0 days Task/Day 22 23 24 25 26 27 28 29 30

Task 1 x x x Task 2 x x Task 3 x x Task 4 x x x x x Task 5 x x Task 4 is dependent upon the completion of which task? a. 1 b. 2 c. 3 d. 5 CORRECT ANSWER a. 1