CC Business and Financial Management

Question 1

What is the purpose of a contractor's business license separate from a trade certificate?

Accepted Answer

To authorize the business entity to legally operate and conduct commerce in a jurisdiction

Answer

To replace the contractor certificate

Answer

To allow the contractor to hire subcontractors

Answer

To obtain building permits

Question 2

What does 'job costing' mean for a contractor?

Accepted Answer

Tracking all labor, material, and overhead expenses for each individual project

Answer

Estimating a project before starting

Answer

Setting the final invoice price

Answer

Calculating payroll taxes

Question 3

Which financial statement shows a contractor's revenue and expenses over a period of time?

Accepted Answer

Income statement (profit and loss statement)

Answer

Balance sheet

Answer

Cash flow statement

Answer

Accounts payable ledger

Question 4

What is 'overhead' in contractor financial management?

Accepted Answer

Indirect business costs not tied to a specific project, such as office rent and insurance

Answer

The cost of roofing materials

Answer

A type of building permit fee

Answer

A project markup percentage

Question 5

What is the purpose of a 'Schedule of Values' on a construction project?

Accepted Answer

To break down the contract price into line items for billing and payment tracking purposes

Answer

To list the value of tools

Answer

To document subcontractor rates

Answer

To calculate payroll taxes

Question 6

What does the term 'retainage' refer to in construction contracts?

Accepted Answer

A percentage of each progress payment withheld by the owner until project completion

Answer

A deposit paid upfront by the contractor

Answer

A fee paid to the licensing board

Answer

A surety bond premium