Louisiana Contractor Business and Law Practice Exam

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• Which cost represents expenses that are fixed irrespective of the project completion?
• What is the main benefit of a comprehensive commercial general liability insurance?
• Do Sub Chapter "S" Corporations retain their status regardless of the number of stockholders?
• If your combined state income tax withholding is less than $500, how must you file your return?
• Which of the following entities can be owned solely by a corporation?
• Indirect labor costs like taxes and insurance are sometimes referred to as ____________.
• An income statement is also known as what?
• What financial document is primarily used to estimate project costs accurately?
• When a member of an LLC dies, which action is typically not required?
• A punch list is created at what stage of the project?
• What is a common consequence of breaching a construction contract?
• Which material is classified as hazardous waste?
• In a construction contract, what is an allowance typically used for?
• Which depreciation method writes off the value of an asset at a uniform rate throughout its usable life?
• What is the purpose of New Hire Reporting?
• What is the maximum project value for a contractor to be considered residential?
• Which act requires payment of prevailing wage rates and fringe benefits on federally financed or assisted construction?
• If a license is denied, how long does the applicant have to appeal?
• What is referred to as a material breach in a contract?
• What is the first and most important element in a contract?
• What number is used by the federal government to identify the tax accounts of employers?
• Should a contractor ordered to cease and desist fail to comply, for how long are they barred from applying for a license?
• What type of insurance protects a builder against theft of materials from a job site?
• What must remain under 100 for a Sub Chapter "S" Corporation to maintain its status?
• Are employers required to post an OSHA poster in a visible area at the workplace?
• What Federal tax form is used by corporations to file their annual return of income?
• What is the renewal fee residential contractors must pay?
• Which accounting method is used to record income at the time it is earned?
• What should be considered when creating a financial plan?
• Which business structure often has the most complex tax requirements?
• Can Sole Proprietorships issue and sell stock in the company to raise capital?
• What type of insurance protects a contractor from losses due to fire on a construction project?
• If a contractor uses 1/2" OSB instead of the specified 5/8" OSB, can they be sued for breach of contract?
• How quickly must employers report a death or hospitalization involving three or more employees to OSHA?
• Who is responsible for paying workers' compensation insurance?
• How many days does a company have to inform the board when a qualifying party leaves employment?
• Can a corporation legally be the sole owner of a property?
• Which insurance policy typically covers equipment in transit?
• If an unlicensed contractor causes damage over $300, what is the maximum fine they could face?
• What is the most critical action for both the contractor and the owner to take before signing a contract?
• Is it always wise to choose the subcontractor who provides the lowest bid?
• What should a contractor consider besides the cost of equipment needed for a project?
• An applicant for a home improvement license must provide proof of registration and proof of what?
• What is the purpose of a Permit Bond in construction?
• What type of contractor works on preexisting owner-occupied buildings?
• Which of the following is an example of non-hazardous construction waste?
• What is one requirement for bonding in public projects?
• Should quality of construction be addressed in the specifications during bidding?
• The importance of pre-qualified bids is to ensure what?
• What are the steps involved in closing out each project?
• Which type of insurance is generally not associated with construction projects?
• What term describes reasonable estimates of funds set aside for a particular item in a project?
• What should a contractor do if he finds a handwritten provision on a drawing?
• Which of the following is an example of a fixed liability?
• A business plan provides potential investors with what?
• Do employers have to pay overtime pay to an employee who works on a holiday?
• Cash receipts, customer invoices, and time cards are all examples of what?
• What is the form of construction estimating in which a fixed price is given for the entire project called?
• As an employer, you are responsible for filing which of the following employment taxes?
• What must be ensured before a project can successfully proceed after changes are made?
• A project has an estimated labor cost of $162,500 and an estimated material cost of $225,100. If the contract is written for $425,000, what profit margin is the contractor expecting to make?
• What is the penalty for a contractor who is found guilty of violations more than twice in a year?
• What is the primary purpose of profitability ratios?
• In what scenario is a project classified as commercial?
• What is the potential penalty for non-compliance with EPA regulations related to lead safe practices?
• Project managers depend on information provided by whom to effectively schedule their projects?
• What is the primary purpose of a lien in Louisiana construction law?
• What potential penalty does an unlicensed contractor face for a misdemeanor?
• What does Wrap-up Liability insurance do in a construction project?
• If a contract is valued at $75,000, what percentage of that amount will an owner require a contractor to provide as a bond?
• If an injury only requires first aid, is that incident required to be recorded?
• If you are naming a Sole Proprietorship something other than your real name, what must you file?
• When are employers required to provide state and federal unemployment insurance?
• What Federal law provides minimum wage and overtime requirements for employers?
• What is the estimated tax payment threshold for sole proprietors, partners, and S-Corporations?
• What document should detail when payments will be made during a project's duration?
• What minimum experience is required for an employee to be considered a qualifying party?
• If an inspector is injured on a job site, which insurance policy would apply for coverage?
• An advantage to renting equipment can be what?
• For companies with more than ten employees, what must be provided regarding emergency situations?
• The Notice of Contract must include all but which of the following?
• Employers are required to report a new employee or rehired employee to which directory?
• What items are usually found in a bid package?
• Is it true that a home improvement contractor is required to register with the Residential Building Contractors Subcommittee?
• What must a person or entity do to legally create a Sole Proprietorship in Louisiana?
• If an employee is injured in an accident completely due to their own negligence, what is their compensation eligibility within the scope of workers' compensation?
• Which type of contract allows the owner to know the total price for the project in advance?
• What is created during a walkthrough to determine any details that still need to be addressed before fully completing a project?
• Which legal structure can allow properties to be owned and managed by a collective of individuals?
• If changes to the original contract occur, what is necessary before the changes are made?
• Which of the following is an example of a financial statement?
• The Wage Garnishment Law prohibits an employer from firing an employee whose pay is garnished for payment of a single debt. What is the status of this statement?
• If you fail to comply with the rules of the board, what are the potential consequences?
• What does OSHA stand for?
• What classification of contractors must comply with board rules or risk license penalties?
• How long are employers required to maintain OSHA records after the year they pertain to?
• How do contractors with high employee retention benefit regarding unemployment tax rates?
• What method is used to allot more time in a project schedule to account for unforeseen delays?
• A general contractor who is contracted for a private project that is valued at more than _______ must file a Notice of Contract prior to beginning work.
• What is the primary purpose of contractor licensing laws?
• Which of the following is NOT a power of the state licensing board?
• Which of the following is NOT one of the four key elements for a contract to be binding?
• A contractor must work on a project valued at ______ or more for commercial purposes.
• Is it allowed for a company to have more than one qualifying party?
• True or False: A contractor who opts to place his license in an inactive status must still submit proof of insurance coverage.
• Why might a corporation seek Sub Chapter "S" status?
• Is it legal to ask a potential employee about their mental health history during an interview?
• What do builders consider when determining the total material costs for a project?
• How many members are on the state licensing board for contractors?
• When adding profit to an estimate, the value is usually determined as what?
• A residential contractor must provide all of the following EXCEPT?
• Which statement about LLCs is true when it comes to inheritance?
• Which of the following can be a qualifying party for a construction company?
• According to Louisiana's Water Quality Regulations, permits are required for the discharge of pollutants from which of the following?
• Which party benefits from a performance bond?
• A home improvement project, in excess of what amount, must have a written contract between the contractor and the owner?
• Which business organization is regulated the least by the government?
• What are changes made to the contract documents after the signing of the basic owner-contractor agreement known as?
• If a company has Current Assets of $115,000 and Fixed Liabilities of $187,258, what is its Liquidity Ratio?
• True or False: Both employers and employees pay federal unemployment taxes.
• What is NOT a reason why project managers require information from subcontractors?
• Does an owner of a property undertaking personal home improvements require a construction license?
• When is a Notice of Termination typically required?
• Under Louisiana contractor rules and regulations, what must all applications include?
• What does the "S" in Sub Chapter "S" Corporation primarily relate to?
• What type of estimating involves calculating project costs based on individual unit prices?
• What does the term 'consideration' imply in a contract?
• Which of the following does FICA contributions finance?
• In what scenario can an employee collect 0% from workers' compensation insurance?
• What can be added into an estimate to cover unexpected expenses?
• If a contractor estimates 10% for project contingencies, what does this aim to cover?
• For a new contract, which factor can contribute to the decision to rent vs. buy equipment?
• What is a primary function of progress payments in a construction contract?
• Which Federal Form must new employees complete for federal tax purposes?
• This statement is true or false: The term 'consideration' means that both parties to a contract must exchange something of value.
• An example of a current asset is?
• What is the first step in completing an estimate?
• True or False: Louisiana's Water Quality Regulations allow for the discharge of pollutants without any permits.
• Are oral contracts valid and difficult to enforce?
• Besides the actual cost of the materials themselves, what other cost must a builder recognize as being a material cost?
• By preparing a preliminary cash flow schedule, project managers can better understand what?
• In a small construction company, who typically serves as the project manager?
• What type of contract involves one contractor taking on all design and construction responsibilities?
• Who has the authority to cancel a builder's risk insurance policy?
• What component is vital for ensuring accuracy in bids for construction projects?
• What does the critical path schedule show?
• Which act allows for the lawful deduction of wages for social insurance?
• What is the purpose of the EIN number?
• What type of insurance provides coverage over worker's compensation in case of employee injury or death?
• What is the term for set-aside money in a contract budget for uncertain costs like electrical and plumbing fixtures?
• What defines a corporation's ability to own property?
• How does an individual appeal a denied contractor license?
• What must a contractor repay if a surety company pays out any funds?
• What taxes are employers required to match contributions for?
• How often must employers pay federal taxes for unemployment insurance?
• What documentation must manufacturers or importers provide for training employees on hazardous materials?
• Spills or incidents involving hazardous material must be reported to which of the following?
• Who is entitled to file a lien in Louisiana?
• What does a Performance Bond guarantee?
• What should prime contractors verify about their subcontractors concerning insurance?
• Where is information from a business journal posted?
• A guarantee for a contractor to pay subcontractors and suppliers is known as what?
• What is the initial license fee that residential contractors must pay?
• What is the maximum number of hours that a minor under the age of 16 is permitted to work?
• Minors under the age of 18 cannot perform which of the following tasks unless defined as an apprentice?
• Why is a change order important in contract management?
• What is the term used for the percentage of contract funds that an owner withholds until project completion?
• Which type of construction project is classified as a commercial project?
• What proof must an applicant provide to the board regarding financial responsibility?
• What is the mandatory penalty for an OSHA citation identified as a serious violation?
• What is the term used for changes made to contract documents before the execution of the agreement?
• When are employers required to start keeping records of job-related injuries and illnesses?
• Who is defined as the person who contracts directly with the owner?
• What are losses paid by the contractor if the project is not completed on time called?
• Unit price estimates consist of assigning costs to what?
• Temporary storage facilities, dumpsters, and utilities are considered _________ overhead.
• What is the basic hourly wage incurred while an employee is being productive in the building process called?
• If a company's current assets total $100,000 and its total liabilities are $50,000, what is its net working capital?
• A National Pollutant Discharge Elimination System (NPDES) Storm Water permit is required for projects where how many acres of land will be disturbed?
• In a general partnership, how is liability for the debt of the company structured?
• What rights does an unlicensed contractor have if they cause damage to another party?
• What does the State of Louisiana require for any employee under the age of 18?
• Using the accrual accounting method, if a contractor completes $12,500 worth of services in June and collects $8,500 in accounts receivable, how much income will the contractor recognize in June?
• What is the primary intent of a retainage clause in a construction contract?
• What is the primary job of a project manager?
• What is the role of a home improvement contractor?
• What is the possible fine for a repeated violation of an OSHA standard?
• What is the best source to use when estimating job site overhead?
• If a company's receipts exceed its disbursements, what can be concluded about its cash flow?
• Which of the following is NOT a benefit of FICA contributions?
• If a violation related to hazardous materials occurs, which agency is primarily responsible for reporting?
• When is retainage usually paid?
• What is a consequence of working as a contractor without a license?
• What OSHA form serves as the annual summary of a company's injuries and illnesses?
• A residential contractor must construct a fixed structure valued over what amount to be licensed?
• What does general liability insurance cover for the contractor?
• Are change orders considered examples of contract modifications?
• What federal act requires a performance bond for projects valued over $100,000?
• Which of the following is a true statement regarding ownership of property by corporations?
• You must pay self-employment taxes if your net earnings were ________ or more.
• What business organization provides the most financial protection for the owners?
• Is an applicant allowed to furnish a bond as proof of net worth?
• What is the responsibility of employers regarding their employees’ contributions to Social Security and Medicare?
• Which financial statement provides a company's net worth?
• How many hours of continuing education must a residential contractor complete per year?
• What is one characteristic of Limited Liability Companies regarding ownership transfer?
• What is the term for the time taken to purchase or manufacture inventory, sell the product, and collect the revenue?
• Recognizing that delays can occur, what should the schedule plan for?
• If a builder accidentally drops a hammer from a roof injuring a member of the public, what type of insurance covers this injury?
• What Federal form are employers required to complete within 3 days of a new hire?
• True or false: The Notice of Termination is designed to protect owners as it shortens the time in which liens must be filed.
• All corporations must file a state income tax return. Is this statement true or false?
• Can a prime contractor be held liable for an uninsured subcontractor's employee claiming workers' compensation benefits?
• What happens to a Limited Liability Company (LLC) when an owner dies?
• A complete list of all materials and items needed to complete a project is referred to as what?
• Why is it important for a contract to provide a payment schedule?
• A critical path schedule can be developed using a calendar. Is this statement true or false?
• What would be an example of a fixed asset?
• How long must exposure records for toxic substances be kept after employment ends?
• Which of the following best describes the role of a prime contractor in a small construction company?
• Typical industry markup is what percentage?
• If an owner of an LLC dies, what is the general requirement for the entity?
• How much does a contractor expect to receive from a progress payment request on a $357,000 contract when previously paid $110,000 and after a 10% retainage is applied to a project that is 50% complete?
• Who is typically responsible for legal liabilities resulting from construction accidents?
• What does adhering to safety standards help to mitigate on a construction site?
• Which document is essential for resolving disputes related to contract changes?
• When do licenses and renewals typically expire?
• During project completion, a contractor provides what document to signify work is finished?
• In Louisiana, which of the following entities often involves fewer regulations?
• In what scenario might a Sub Chapter "S" Corporation risk losing its status?
• Are sole proprietorship owners required to purchase workers' compensation insurance for themselves?
• What is the term for allocating the cost of a fixed asset over its useful life?
• What is the duration that a contractor who violates the rules more than twice in a year cannot bid on public projects?