CFP Business Management & Operations Flashcards

Which type of business structure provides the owner with personal liability protection for business debts?

Answer: Limited liability company (LLC)

An LLC separates the owner's personal assets from business liabilities, protecting personal property if the business is sued or incurs debt.

A fence contractor who fails to pay workers' compensation premiums risks which consequence?

Answer: Personal liability for injured worker medical costs and lost wages

Without workers' compensation insurance, the contractor becomes personally responsible for medical expenses and lost wages if an employee is injured on the job.

Which scheduling tool visually displays project tasks, durations, and dependencies in a bar-chart format?

Answer: Gantt chart

A Gantt chart is a horizontal bar chart that shows each task's start and end dates, allowing contractors to visualize the entire project schedule at a glance.

What does a fence contractor's 'backlog' represent?

Answer: The total value of signed contracts not yet completed

Backlog is the dollar value of contracted work that has been sold but not yet completed, indicating future revenue and workload.

Which document should a fence contractor provide to a client upon full project completion to confirm all work has been finished?

Answer: Certificate of completion / final lien waiver

A certificate of completion (often accompanied by a final lien waiver) confirms the project is finished and waives the contractor's right to place a mechanic's lien upon final payment.

An employee's W-2 form reports which type of compensation information?

Answer: Wages earned and taxes withheld during the calendar year

The W-2 form, issued by the employer, reports an employee's total wages, tips, and other compensation along with all federal, state, and local taxes withheld.