NASCLA Contractors Guide-Basic | exam review 2024
The Americans with Disabilities Act (ADA) does not cover the following: ** Answ**
Influenza.
According to the FMLA, an employer MUST offer up to 12 weeks of unpaid leave to an
eligible employee who? ** Answ** Adopts a child
What is the main weakness of a Bar Chart? ** Answ** It does not show the
interdependencies of the activities.
What are three key functions of a business plan? ** Answ** Planning Tool, Loan or
Investor Document, Benchmarking tool
A contractor's Business Plan does NOT include? ** Answ** Contract Documents
Which business structure is considered the simplest to setup? ** Answ** Sole
Proprietorship
What is the major disadvantage of a sole proprietorship? ** Answ** Unlimited
personal liability
With a sole proprietorship, doing business under a different name other than your own
typically requires filing of what document? ** Answ** Fictitious name certificate with
local or state government office
Which of the following is most important when entering into a 50/50 partnership? **
Answ** Prepare a written agreement.
With a Partnership, are you responsible for the actions of your partner? ** Answ**
Yes, if they act in the name of the business
Which individuals have NO managerial decision-making power and have liability
restricted to the amount of the investment? ** Answ** limited partnership
A partnership dissolves leaving a debt of $50,000. How is each partner liable? **
Answ** Each partner is liable for the entire amount.
A _________ is a legal relationship where two or more persons are contractually
associated as principals in a business? ** Answ** General Partnership
,Joe and Harry have formed a partnership. Joe invests 40% of his personal finances and
Harry invests 60% of his finances. The partnership dissolves after 3 years with debts
owed to suppliers of $50,000. How much is Joe liable for? ** Answ** $50,000
What is one of the ADVANTAGES of a partnership? ** Answ** Partnerships share
financial resources.
Three people join together to form a partnership. One of the partners fails to meet their
financial obligations. ** Answ** the other two partners can be forced to pay
What is a main disadvantage of a C Corporation? ** Answ** Double taxation - You
are taxed once on the corporate profits and again on dividends to shareholders
What is the main advantage of an S Corporation? ** Answ** You avoid double
taxation
Which IRS Form is required to elect S Corporation status? ** Answ** Form 2553
What is a primary benefit of an S corporation? ** Answ** S corporations don't pay
taxes directly, but instead shareholders file them on their individual returns
What is an ADVANTAGE of a C corporation? ** Answ** Limited liability for debts
and actions of the corporation.
What is the advantage of a Limited Liability Corporation (LLC)? ** Answ** Like an S
corporation, Federal income tax is only filed on income distributed to members
Joint ventures are typically used when? ** Answ** Two or more entities want to join
together on a special project.
What do you call a special business arrangement that exists between 2 or more
companies to undertake a specific project? ** Answ** Joint Venture
What is the main purpose of insurance? ** Answ** To supplement your risk against
accidents and theft
Property insurance typically covers what types of loss? ** Answ** Your business
and personal property when damage, theft or loss occurs
, What type of insurance should a contractor have to cover losses from theft or fire? **
Answ** property insurance
A __________ protects the transporter against freight damage penalties. ** Answ**
transportation floater policy
While construction is in progress What type of insurance would be used to provide
coverage for machinery, equipment, materials, supplies, and fixtures that are part of the
structure or will become part of the structure. ** Answ** All-Risk Builder's Risk
Insurance.
What type of insurance would provide insurance against natural disasters such as
lightning or high winds? ** Answ** Named Peril Builders' Risk Insurance
Which type of policy is an inland marine insurance product to cover direct physical loss
to mobile equipment while it is stored on-premises, in transit, or at a temporary location?
** Answ** An equipment floater policy
What policy bundles property and liability coverage together? ** Answ** Business
Owner Policy
What policy bundles property and liability coverage together? ** Answ** Business
Owner Policy
Which type of insurance provides coverage against claims exceeding the coverage
provided by the standard general liability? ** Answ** Umbrella liability insurance
What type of insurance protects the contractor for design oversights? ** Answ**
Professional Liability.
A builder only carries Commercial General Liability (CGL) Insurance. What would be
covered by the policy? ** Answ** Injury to people not employed by the company.
Directors and Officers Liability insurance (also known as D&O coverage) wrongful acts
arising out of their duties to the corporation.provides protection to a company's directors
and officers against claims for ______ ** Answ** wrongful acts arising out of their
duties to the corporation.
What type of insurance policy covers bodily injury for non-employees that results in any
physical loss or damage except for specifically listed exclusions? ** Answ**
Commercial General Liability
The Americans with Disabilities Act (ADA) does not cover the following: ** Answ**
Influenza.
According to the FMLA, an employer MUST offer up to 12 weeks of unpaid leave to an
eligible employee who? ** Answ** Adopts a child
What is the main weakness of a Bar Chart? ** Answ** It does not show the
interdependencies of the activities.
What are three key functions of a business plan? ** Answ** Planning Tool, Loan or
Investor Document, Benchmarking tool
A contractor's Business Plan does NOT include? ** Answ** Contract Documents
Which business structure is considered the simplest to setup? ** Answ** Sole
Proprietorship
What is the major disadvantage of a sole proprietorship? ** Answ** Unlimited
personal liability
With a sole proprietorship, doing business under a different name other than your own
typically requires filing of what document? ** Answ** Fictitious name certificate with
local or state government office
Which of the following is most important when entering into a 50/50 partnership? **
Answ** Prepare a written agreement.
With a Partnership, are you responsible for the actions of your partner? ** Answ**
Yes, if they act in the name of the business
Which individuals have NO managerial decision-making power and have liability
restricted to the amount of the investment? ** Answ** limited partnership
A partnership dissolves leaving a debt of $50,000. How is each partner liable? **
Answ** Each partner is liable for the entire amount.
A _________ is a legal relationship where two or more persons are contractually
associated as principals in a business? ** Answ** General Partnership
,Joe and Harry have formed a partnership. Joe invests 40% of his personal finances and
Harry invests 60% of his finances. The partnership dissolves after 3 years with debts
owed to suppliers of $50,000. How much is Joe liable for? ** Answ** $50,000
What is one of the ADVANTAGES of a partnership? ** Answ** Partnerships share
financial resources.
Three people join together to form a partnership. One of the partners fails to meet their
financial obligations. ** Answ** the other two partners can be forced to pay
What is a main disadvantage of a C Corporation? ** Answ** Double taxation - You
are taxed once on the corporate profits and again on dividends to shareholders
What is the main advantage of an S Corporation? ** Answ** You avoid double
taxation
Which IRS Form is required to elect S Corporation status? ** Answ** Form 2553
What is a primary benefit of an S corporation? ** Answ** S corporations don't pay
taxes directly, but instead shareholders file them on their individual returns
What is an ADVANTAGE of a C corporation? ** Answ** Limited liability for debts
and actions of the corporation.
What is the advantage of a Limited Liability Corporation (LLC)? ** Answ** Like an S
corporation, Federal income tax is only filed on income distributed to members
Joint ventures are typically used when? ** Answ** Two or more entities want to join
together on a special project.
What do you call a special business arrangement that exists between 2 or more
companies to undertake a specific project? ** Answ** Joint Venture
What is the main purpose of insurance? ** Answ** To supplement your risk against
accidents and theft
Property insurance typically covers what types of loss? ** Answ** Your business
and personal property when damage, theft or loss occurs
, What type of insurance should a contractor have to cover losses from theft or fire? **
Answ** property insurance
A __________ protects the transporter against freight damage penalties. ** Answ**
transportation floater policy
While construction is in progress What type of insurance would be used to provide
coverage for machinery, equipment, materials, supplies, and fixtures that are part of the
structure or will become part of the structure. ** Answ** All-Risk Builder's Risk
Insurance.
What type of insurance would provide insurance against natural disasters such as
lightning or high winds? ** Answ** Named Peril Builders' Risk Insurance
Which type of policy is an inland marine insurance product to cover direct physical loss
to mobile equipment while it is stored on-premises, in transit, or at a temporary location?
** Answ** An equipment floater policy
What policy bundles property and liability coverage together? ** Answ** Business
Owner Policy
What policy bundles property and liability coverage together? ** Answ** Business
Owner Policy
Which type of insurance provides coverage against claims exceeding the coverage
provided by the standard general liability? ** Answ** Umbrella liability insurance
What type of insurance protects the contractor for design oversights? ** Answ**
Professional Liability.
A builder only carries Commercial General Liability (CGL) Insurance. What would be
covered by the policy? ** Answ** Injury to people not employed by the company.
Directors and Officers Liability insurance (also known as D&O coverage) wrongful acts
arising out of their duties to the corporation.provides protection to a company's directors
and officers against claims for ______ ** Answ** wrongful acts arising out of their
duties to the corporation.
What type of insurance policy covers bodily injury for non-employees that results in any
physical loss or damage except for specifically listed exclusions? ** Answ**
Commercial General Liability
