Business and Law Principles Flashcards
7 cards from real Licensed Electrical Contractor 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 Law Principles flashcards as text
Which financial statement shows a contractor's revenues, expenses, and profit or loss over a specific period of time?
Answer: Income statement (profit and loss statement)
The income statement (also called a profit and loss or P&L statement) summarizes revenues earned and expenses incurred during a specific accounting period to show net profit or loss.
A contractor who abandons a project without legal justification may face all of the following EXCEPT:
Answer: Mandatory criminal prosecution under federal law
Unjustified job abandonment is primarily a civil and licensing matter; it does not automatically trigger mandatory federal criminal prosecution, though fraud-related abandonment could involve criminal charges.
The 'Rule of Three' in competitive bidding generally means that:
Answer: Bids must be solicited from at least three vendors on public projects above a threshold
Many public agencies require a minimum of three competitive bids for purchases or contracts above a certain dollar threshold to ensure fair competition and prevent favoritism.
Under OSHA regulations, which of the following is a contractor's recordkeeping obligation for serious injuries and illnesses?
Answer: Maintain OSHA Form 300 (injury and illness log) if they have 11 or more employees
Employers with 11 or more employees (in most industries) must maintain OSHA Form 300, the Log of Work-Related Injuries and Illnesses, for recordable incidents throughout the year.
What is the primary purpose of a 'notice to proceed' (NTP) document in construction contracts?
Answer: It is the owner's formal written authorization for the contractor to begin work, establishing the official project start date
A Notice to Proceed is the formal written communication from the owner or their representative authorizing the contractor to mobilize and begin work, and it sets the clock running on contract duration.
An electrical contractor who falsifies inspection records or submits fraudulent documentation to a licensing board is most likely to face:
Answer: Permanent revocation of license and potential criminal charges for fraud
Submitting fraudulent documents to government authorities constitutes fraud, which can result in permanent license revocation and criminal prosecution beyond typical disciplinary measures.
What does 'indemnification' (hold harmless) language in a subcontract typically require the electrical subcontractor to do?
Answer: Defend and pay for damages arising from the subcontractor's own negligence, protecting the general contractor from those claims
An indemnification clause typically requires the subcontractor to protect, defend, and hold harmless the general contractor from claims, losses, or damages arising out of the subcontractor's work or negligence.