Business and Finance Management Flashcards
7 cards from real General Contractor License practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Business and Finance Management flashcards as text
A contractor wants to determine if a project is profitable mid-job. Which document provides the best real-time comparison of budgeted vs. actual costs?
Answer: Job cost report
A job cost report compares estimated costs to actual costs incurred, allowing mid-project profitability analysis by cost category.
Under the completed-contract accounting method, revenue and expenses are recognized:
Answer: When the project reaches substantial completion
The completed-contract method defers all revenue and expense recognition until the project is substantially complete.
An owner withholds 10% of each progress payment until project completion. This withheld amount is called:
Answer: Retainage
Retainage is a percentage of earned payment withheld by the owner as security to ensure the contractor completes the work satisfactorily.
Which of the following is considered a direct cost on a construction project?
Answer: Field supervisor wages on the job site
Direct costs are directly attributable to a specific project, including on-site labor, materials, and equipment used for that job.
A contractor's net profit margin is 5% on a $2,000,000 project. What is the net profit?
Answer: $100,000
Net profit = Revenue × Profit margin: $2,000,000 × 5% = $100,000.
Which type of estimate is typically most accurate and used as the basis for a formal bid?
Answer: Detailed quantity takeoff estimate
A detailed quantity takeoff estimate quantifies every material and labor unit required, providing the highest level of accuracy for bidding.
A contractor who fails to carry required workers' compensation insurance may face which consequence?
Answer: License suspension, fines, and personal liability for worker injuries
Operating without required workers' compensation exposes contractors to license revocation, significant fines, and direct liability for injured workers' costs.