NCARB - Project Management Exam Questions with Correct Answers Latest Update 2025
Profit - Answers Fees for services minus the operating expenses;
Income - costs of services - Overhead = Profit (before tax)
Basic Services - Answers Services that the architect agrees to provide under the scope of the contract
with the owner
NTE - Answers Not - To - Exceed
Indirect Expenses - Answers Indirect Expenses incurred and not chargeable to a specific project. Same as
Overhead
Hourly NTE Proposal - Answers A cost proposal where the architect invoices the owner for all costs of
basic services incurred on the project up to a predetermined limit not to exceed
Hourly Fee Proposal - Answers A cost proposal where the architect invoices the owner for all costs of
basic services incurred on the project with no fixed limit but assessed hourly
Additional Services - Answers Services that are above and beyond the agreed upon 'basic services' scope
of the original contract
Balance Sheet - Answers A financial statement that shows assets & liabilities at a specific date
Boilerplate - Answers A section of a standard text, especially a contract clause, that is already existing
and available to use or be inserted in to legal documents.
Fixed Fee Proposal - Answers A cost proposal where the fees for the architect's services are
predetermined before work is started
Financial Year - Answers A 12-month period of business activity
Due Care - Answers The requirement that a professional exercise reasonable ability and judgement in a
specific circumstance, the absence of which constitutes negligence. Same as Standard of Care
Overhead - Answers Expenses indirectly incurred and not chargeable to a specific project. Same as
Indirect Expense
Profit/Loss Statement - Answers Shows the final outcome of the firm's financial performance over the
past financial year. Shows sales, cost of sales, gross margin, operating expenses, and profits or losses.
DPE - Answers Direct Personnel Expense
Direct Personnel Expense - Answers Salaries and wages attributable to a specific project, plus benefits
such and employment taxes, insurance, sick leave, holidays, vacations pensions, and similar
contributions and benefits.
, Direct Expense - Answers Expenses directly incurred by or attributable to a specific project.
Standard of Care - Answers The requirement that a professional exercise reasonable ability and
judgment in a specific circumstance, the absence of which constitutes negligence. Same as Due Care
Professional Liability Insurance - Answers Insurance that financially protects an architect against claims
for damages resulting rom professional negligence. Same as Errors & Omissions Insurance
Operating Expenses - Answers Expenses incurred in conducting normal business operations including
wages, salaries, and administrative and marketing. Does not include interest, depreciation, and taxes.
Top-Down Budget - Answers A type of budget where the agreed-upon fee for services is set first (at the
top of a balance sheet) and the work effort is derived from it (working downward). Usually the result of
a fixed fee proposal.
Bottom-Up Budget - Answers A type of budget where the work effort is estimated first (usually at the
bottom of the balance sheet) and then the total fee required to perform the work is determined from
(working up toward the top of the balance sheet).
Accounts Receivable - Answers The money that the architect is owed from various entities for whom
work is being performed, including owners. Usually assessed on a monthly basis.
Compensation - Answers Sum of direct benefits (such as base salary, allowances, bonuses, and
commission) and indirect benefits (such as insurance, pensions, and vacations) that an employee
receives from an employer
Pro Bono - Answers A project or task that is done or undertaken for the public good without any
payment or compensation.
Accounts Payable - Answers The money that the architect owes to various entities, including consultants
and independent contractors.
Net 30 - Answers A term used to describe the relationship between the generation of an invoice and the
time expected the pay that invoice. Usually 30 days. Unpaid invoice beyond this limit are referred to as
aged invoices.
Profit Before Interest & Taxes - Answers Gross margin minus operating expenses. Same as EBIT (Earnings
Before Interest)
EBIT - Answers Earnings Before Interest
Construction Budget - Answers The sum established by the owner as available for construction of the
project. Can be used as the basis for architect's fee proposal, which is often a fixed percentage of the
construction budget.
Profit - Answers Fees for services minus the operating expenses;
Income - costs of services - Overhead = Profit (before tax)
Basic Services - Answers Services that the architect agrees to provide under the scope of the contract
with the owner
NTE - Answers Not - To - Exceed
Indirect Expenses - Answers Indirect Expenses incurred and not chargeable to a specific project. Same as
Overhead
Hourly NTE Proposal - Answers A cost proposal where the architect invoices the owner for all costs of
basic services incurred on the project up to a predetermined limit not to exceed
Hourly Fee Proposal - Answers A cost proposal where the architect invoices the owner for all costs of
basic services incurred on the project with no fixed limit but assessed hourly
Additional Services - Answers Services that are above and beyond the agreed upon 'basic services' scope
of the original contract
Balance Sheet - Answers A financial statement that shows assets & liabilities at a specific date
Boilerplate - Answers A section of a standard text, especially a contract clause, that is already existing
and available to use or be inserted in to legal documents.
Fixed Fee Proposal - Answers A cost proposal where the fees for the architect's services are
predetermined before work is started
Financial Year - Answers A 12-month period of business activity
Due Care - Answers The requirement that a professional exercise reasonable ability and judgement in a
specific circumstance, the absence of which constitutes negligence. Same as Standard of Care
Overhead - Answers Expenses indirectly incurred and not chargeable to a specific project. Same as
Indirect Expense
Profit/Loss Statement - Answers Shows the final outcome of the firm's financial performance over the
past financial year. Shows sales, cost of sales, gross margin, operating expenses, and profits or losses.
DPE - Answers Direct Personnel Expense
Direct Personnel Expense - Answers Salaries and wages attributable to a specific project, plus benefits
such and employment taxes, insurance, sick leave, holidays, vacations pensions, and similar
contributions and benefits.
, Direct Expense - Answers Expenses directly incurred by or attributable to a specific project.
Standard of Care - Answers The requirement that a professional exercise reasonable ability and
judgment in a specific circumstance, the absence of which constitutes negligence. Same as Due Care
Professional Liability Insurance - Answers Insurance that financially protects an architect against claims
for damages resulting rom professional negligence. Same as Errors & Omissions Insurance
Operating Expenses - Answers Expenses incurred in conducting normal business operations including
wages, salaries, and administrative and marketing. Does not include interest, depreciation, and taxes.
Top-Down Budget - Answers A type of budget where the agreed-upon fee for services is set first (at the
top of a balance sheet) and the work effort is derived from it (working downward). Usually the result of
a fixed fee proposal.
Bottom-Up Budget - Answers A type of budget where the work effort is estimated first (usually at the
bottom of the balance sheet) and then the total fee required to perform the work is determined from
(working up toward the top of the balance sheet).
Accounts Receivable - Answers The money that the architect is owed from various entities for whom
work is being performed, including owners. Usually assessed on a monthly basis.
Compensation - Answers Sum of direct benefits (such as base salary, allowances, bonuses, and
commission) and indirect benefits (such as insurance, pensions, and vacations) that an employee
receives from an employer
Pro Bono - Answers A project or task that is done or undertaken for the public good without any
payment or compensation.
Accounts Payable - Answers The money that the architect owes to various entities, including consultants
and independent contractors.
Net 30 - Answers A term used to describe the relationship between the generation of an invoice and the
time expected the pay that invoice. Usually 30 days. Unpaid invoice beyond this limit are referred to as
aged invoices.
Profit Before Interest & Taxes - Answers Gross margin minus operating expenses. Same as EBIT (Earnings
Before Interest)
EBIT - Answers Earnings Before Interest
Construction Budget - Answers The sum established by the owner as available for construction of the
project. Can be used as the basis for architect's fee proposal, which is often a fixed percentage of the
construction budget.
