WV BUSINESS LAW PRACTICE EXAM FOR CONTRACTORS
1. What type of contract requires the contractor to be responsible for both the engineering and
construction of a project?
a. Traditional
b. Design build
c. Turn key
d. Concession - (ANSWER)b. Design build
2. By what date is an employer required to provide its employees with a W-2?
a. January 31
b. February 15
c. March 31
d. April 15 - (ANSWER)a. January 31
3. When developing a project schedule, what does WBS stand for?
a. Work breakdown structure
b. Work building schedule
c. Wall board system
d. Whole build system - (ANSWER)a. Work breakdown structure
4. Overtime wages are paid at what percentage of the normal wage rate? - (ANSWER)c. 150%
5. Using the percentage method of withholding, what is the income tax deducted form an employees
wages that earns $1,500 per pay period, is paid bi-weekly, is single and claims no deductions?
a. $82.95
b. 165.90
,c. $194.50
d. $214.50 - (ANSWER)c. $194.50
6. What is the penalty for submitting an IRS payroll tax deposit in the amount of $5,000 that is 2 days
late?
a. $100
b. $250
c. $500
d. $750 - (ANSWER)a. $100
The accounting method that recognizes income and expenses only when money is received or paid is
called:
a. the PCM Method
b. the Accrual method
c. the cash method
d. the cost-comparison method - (ANSWER)c. the Cash method
Employers are required to notify employees of changes in policies affecting all the following EXCEPT:
a. pay schedules
b vacation allowance
c. health benefits
d. promotion opportunities - (ANSWER)d. promotion opportunities
What is the process for obtaining a contractor license if the existing license has lapsed? (Do not consider
exceptions)
a. Submit a renewal application with the renewal fee.
b. Submit a renewal application, renewal fee and a $25 late fee.
c. Submit a new license application using test scores from original license.
d. Submit a new license application and retake licensing exams. - (ANSWER)d. Submit a new license
application and retake licensing exams.
,What does the term "replacement cost" mean relative to insurance coverage?
a. The insurer will pay the policy holder an amount sufficient to cover the acquisition of the same tool at
today's prices.
b. The insurer will pay the policy holder an amount equial to the depreciated value of the tool.
c. The insurer will pay the policy holder an amount sufficient to cover the acquisition of a newer model
tool at today's prices.
d. The insurer will pay the policy holder an amount equal to a negotiated rate for value of a generic tool.
- (ANSWER)a. The insurer will pay the policy holder an amount sufficient to cover the acquisition of the
same tool at today's prices.
All construction projects in West Virginia require a written contract when the total value of the contract
EXCEEDS:
a. $1,500
b. $2,500
c. $10,000
d. $25,000 - (ANSWER)c. $10,000
When estimating the amount of time a task will take to complete, all the following elements should be
considered EXCEPT:
a. production time
b. estimating time
c. setup time
d. contingency time - (ANSWER)b. estimating time
How long are employers required to maintain reportable accident or incident records?
a. 4 years
b. 5 years
c. 6 years
d. 7 years - (ANSWER)b. 5 years
, Which of the following would be considered a current liability?
a. Payroll
b. Building lease
c. Equipment loan
d. Stock - (ANSWER)a. Payroll
A business pays its employees every two weeks. During the first week of the pay period, the employee
works 30 hours. During the second week the employee works 50 hours. The employee is paid $10 per
hour. What are the gross wages of the employee for the pay period?
a. $800
b. $850
c. $1050
d. $1200 - (ANSWER)b. $850
On a balance sheet, the term "current" means what?
a. One week or less
b. One month or less
c. One year or less
d. Two years or less - (ANSWER)c. One year or less
Which of the following contractor licenses are EXEMPT from wage bond requirements even if they have
been providing services in West Virginia for less than five (5) years?
a. Commercial Contractors
b. Residential Contractors
c. Electrical Contractors
d. Plumbing Contractors - (ANSWER)b. Residential Contractors
When referring to contracts, what does the term "consideration" mean?
a. Compensation
b. Agreement
1. What type of contract requires the contractor to be responsible for both the engineering and
construction of a project?
a. Traditional
b. Design build
c. Turn key
d. Concession - (ANSWER)b. Design build
2. By what date is an employer required to provide its employees with a W-2?
a. January 31
b. February 15
c. March 31
d. April 15 - (ANSWER)a. January 31
3. When developing a project schedule, what does WBS stand for?
a. Work breakdown structure
b. Work building schedule
c. Wall board system
d. Whole build system - (ANSWER)a. Work breakdown structure
4. Overtime wages are paid at what percentage of the normal wage rate? - (ANSWER)c. 150%
5. Using the percentage method of withholding, what is the income tax deducted form an employees
wages that earns $1,500 per pay period, is paid bi-weekly, is single and claims no deductions?
a. $82.95
b. 165.90
,c. $194.50
d. $214.50 - (ANSWER)c. $194.50
6. What is the penalty for submitting an IRS payroll tax deposit in the amount of $5,000 that is 2 days
late?
a. $100
b. $250
c. $500
d. $750 - (ANSWER)a. $100
The accounting method that recognizes income and expenses only when money is received or paid is
called:
a. the PCM Method
b. the Accrual method
c. the cash method
d. the cost-comparison method - (ANSWER)c. the Cash method
Employers are required to notify employees of changes in policies affecting all the following EXCEPT:
a. pay schedules
b vacation allowance
c. health benefits
d. promotion opportunities - (ANSWER)d. promotion opportunities
What is the process for obtaining a contractor license if the existing license has lapsed? (Do not consider
exceptions)
a. Submit a renewal application with the renewal fee.
b. Submit a renewal application, renewal fee and a $25 late fee.
c. Submit a new license application using test scores from original license.
d. Submit a new license application and retake licensing exams. - (ANSWER)d. Submit a new license
application and retake licensing exams.
,What does the term "replacement cost" mean relative to insurance coverage?
a. The insurer will pay the policy holder an amount sufficient to cover the acquisition of the same tool at
today's prices.
b. The insurer will pay the policy holder an amount equial to the depreciated value of the tool.
c. The insurer will pay the policy holder an amount sufficient to cover the acquisition of a newer model
tool at today's prices.
d. The insurer will pay the policy holder an amount equal to a negotiated rate for value of a generic tool.
- (ANSWER)a. The insurer will pay the policy holder an amount sufficient to cover the acquisition of the
same tool at today's prices.
All construction projects in West Virginia require a written contract when the total value of the contract
EXCEEDS:
a. $1,500
b. $2,500
c. $10,000
d. $25,000 - (ANSWER)c. $10,000
When estimating the amount of time a task will take to complete, all the following elements should be
considered EXCEPT:
a. production time
b. estimating time
c. setup time
d. contingency time - (ANSWER)b. estimating time
How long are employers required to maintain reportable accident or incident records?
a. 4 years
b. 5 years
c. 6 years
d. 7 years - (ANSWER)b. 5 years
, Which of the following would be considered a current liability?
a. Payroll
b. Building lease
c. Equipment loan
d. Stock - (ANSWER)a. Payroll
A business pays its employees every two weeks. During the first week of the pay period, the employee
works 30 hours. During the second week the employee works 50 hours. The employee is paid $10 per
hour. What are the gross wages of the employee for the pay period?
a. $800
b. $850
c. $1050
d. $1200 - (ANSWER)b. $850
On a balance sheet, the term "current" means what?
a. One week or less
b. One month or less
c. One year or less
d. Two years or less - (ANSWER)c. One year or less
Which of the following contractor licenses are EXEMPT from wage bond requirements even if they have
been providing services in West Virginia for less than five (5) years?
a. Commercial Contractors
b. Residential Contractors
c. Electrical Contractors
d. Plumbing Contractors - (ANSWER)b. Residential Contractors
When referring to contracts, what does the term "consideration" mean?
a. Compensation
b. Agreement
