CCA Construction Cost Principles & Accounting

Question 1

What are direct costs in a construction project?

Accepted Answer

Project-specific materials and labor

Answer

Company-wide insurance policies

Answer

Accounting department expenses

Answer

Office rent

Question 2

Which document lists each line-item cost for a construction project?

Accepted Answer

Schedule of Values

Answer

Balance sheet

Answer

Change order

Answer

Invoice summary

Question 3

What is the purpose of cost coding in construction accounting?

Accepted Answer

To classify and track project expenses

Answer

To conceal unnecessary costs

Answer

To adjust contractor fees

Answer

To calculate insurance liabilities

Question 4

Which method is commonly used to allocate indirect costs?

Accepted Answer

Overhead allocation rate

Answer

Lump sum billing

Answer

Straight-line depreciation

Answer

Cash basis accounting

Question 5

How are retainage amounts typically treated in construction accounting?

Accepted Answer

Recorded as a liability until paid

Answer

Included in change orders

Answer

Counted as profit immediately

Answer

Written off as contingency

Question 6

Which type of accounting is most common in construction projects?

Accepted Answer

Accrual accounting

Answer

Cash accounting

Answer

Modified accrual accounting

Answer

Single-entry accounting