CONSTRUCTION BUSINESS
ACCOUNTING & FINANCIAL
MANAGEMENT: KEY CONCEPTS AND
REGULATIONS EXAM QUESTIONS AND
ANSWERS 2026.
If a construction company buys a new car for general use by the sales staff, to which of the
following accounts would the depreciation of the car be charged? - ANS General and
administrative costs
Which of the following will allow employers to keep track of products and services purchased? -
ANS Purchase order form
In accounting, fixed costs can be: - ANS Rent, property taxes, and salaries
Which of the following statements best describes the difference between the balance sheet and
income statement? - ANS The balance sheet shows net worth at a particular point in time,
while the income statement shows profit earned over a period of time.
What is the purpose of the IRS publication, Circular E? - ANS An employer's Tax Guide that
has instructions on how to calculate withholding tax and depositing employee's taxes.
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
, How often does an employer have to file FUTA? - ANS Yearly
What is a liability? - ANS All debts and obligations owed by the business
What are the fixed costs in the construction business? - ANS Expenses such as rent,
manager's salary, etc.
Which of the following depreciation methods allows a contractor to depreciate the same
amount every year? - ANS Straight line depreciation
What does the ceiling limit mean in tax? - ANS Maximum tax that can be imposed
Which of the following depreciation methods allows a contractor to depreciate the significant
amount of an item in the first year? - ANS Accelerated depreciation
What is Long-Term Liability? - ANS Any debt that extends for more than 1 year
Assets that are purchased for use in operations but are not intended to be resold are called: -
ANS Fixed assets
A cash shortage is BEST avoided by: - ANS Establishing progress payments to cover cash flow
How is a line of credit with suppliers established? - ANS Sign a promissory note with the
suppliers ensuring that invoices will be paid monthly
The two types of external financing available to a business are: - ANS Equity funds and debt
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
ACCOUNTING & FINANCIAL
MANAGEMENT: KEY CONCEPTS AND
REGULATIONS EXAM QUESTIONS AND
ANSWERS 2026.
If a construction company buys a new car for general use by the sales staff, to which of the
following accounts would the depreciation of the car be charged? - ANS General and
administrative costs
Which of the following will allow employers to keep track of products and services purchased? -
ANS Purchase order form
In accounting, fixed costs can be: - ANS Rent, property taxes, and salaries
Which of the following statements best describes the difference between the balance sheet and
income statement? - ANS The balance sheet shows net worth at a particular point in time,
while the income statement shows profit earned over a period of time.
What is the purpose of the IRS publication, Circular E? - ANS An employer's Tax Guide that
has instructions on how to calculate withholding tax and depositing employee's taxes.
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
, How often does an employer have to file FUTA? - ANS Yearly
What is a liability? - ANS All debts and obligations owed by the business
What are the fixed costs in the construction business? - ANS Expenses such as rent,
manager's salary, etc.
Which of the following depreciation methods allows a contractor to depreciate the same
amount every year? - ANS Straight line depreciation
What does the ceiling limit mean in tax? - ANS Maximum tax that can be imposed
Which of the following depreciation methods allows a contractor to depreciate the significant
amount of an item in the first year? - ANS Accelerated depreciation
What is Long-Term Liability? - ANS Any debt that extends for more than 1 year
Assets that are purchased for use in operations but are not intended to be resold are called: -
ANS Fixed assets
A cash shortage is BEST avoided by: - ANS Establishing progress payments to cover cash flow
How is a line of credit with suppliers established? - ANS Sign a promissory note with the
suppliers ensuring that invoices will be paid monthly
The two types of external financing available to a business are: - ANS Equity funds and debt
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
