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Business Finance Exam with complete
solutions latest version
How should a contractor estimate overhead costs? - CORRECT ANSWER-Base
estimates on projected expenses
What information should a job filing system contain? - CORRECT ANSWER-Contract
documents
Debts that are due within one year are known as _______________. - CORRECT
ANSWER-Current liabilities
Direct labor is comprised of: - CORRECT ANSWER-Actual cost of labor payroll
If "2%, 10; net 30" or "2% prox 10, net 30," appear on a supplier's billing statement,
what does it mean? - CORRECT ANSWER-A 2% discount is given if the bill is paid by
the 10th day, otherwise the bill is to be paid in full by the 30th day
What is Long-Term Liability? - CORRECT ANSWER-Any debt that extends for more
than 1 year
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? - CORRECT
ANSWER-General and administrative costs
Employers must report and pay federal unemployment (FUTA) tax to which agency? -
CORRECT ANSWER-Internal Revenue Service
Deduction of taxes that reach the ceiling, such as social security tax, occur when: -
CORRECT ANSWER-Wages reach that point, the deductions (or withholdings) will stop
Which method of accounting is recommended for a construction business? - CORRECT
ANSWER-Accrual basis
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Working capital is defined as: - CORRECT ANSWER-Total current assets minus total
current liabilities
What is considered a variable cost to a contractor? - CORRECT ANSWER-Construction
material
FICA taxes are: - CORRECT ANSWER-Paid by both the employer and employee
Although employers report social security (FICA) tax to the IRS, what are the
appropriate shares paid by the employee and employer? - CORRECT ANSWER-50%
employer and 50% employee
If John, a contractor, decides to take out a loan to pay for a truck, he should obtain a: -
CORRECT ANSWER-Intermediate term loan to be paid in 1-7 years
The term "net worth" on a corporate balance sheet represents: - CORRECT ANSWER-
The claim of the owners on the assets of the business
Which of the following shows how far past-due each customer's payment is? -
CORRECT ANSWER-Accounts receivable aging report
Which of the following items is listed as a current asset on a balance sheet? -
CORRECT ANSWER-Accounts receivable
Which of the following statements best describes the difference between the balance
sheet and income statement? - CORRECT ANSWER-The balance sheet shows net
worth at a particular point in time, while the income statement shows profit earned over
a period of time.
The key functions of a business plan are: - CORRECT ANSWER-Planning/forecasting
tool, loan or investor document, benchmarking/management tool
If an $8.30 discrepancy emerges between debits and credits, what should the
bookkeeper do? - CORRECT ANSWER-Find the error, no matter how long it takes
Which of the following will allow employers to keep track of products and services
purchased? - CORRECT ANSWER-Purchase order form
To keep accurate accounting records, it is recommended that the contractor: -
CORRECT ANSWER-Hire a bookkeeper or CPA to maintain accounting data
Liabilities are broken down into two major categories: - CORRECT ANSWER-Current
and long-term
Contracts, sales receipts and disbursements should be kept at LEAST: - CORRECT
ANSWER-5 years
BRAINSCAPE1
Business Finance Exam with complete
solutions latest version
How should a contractor estimate overhead costs? - CORRECT ANSWER-Base
estimates on projected expenses
What information should a job filing system contain? - CORRECT ANSWER-Contract
documents
Debts that are due within one year are known as _______________. - CORRECT
ANSWER-Current liabilities
Direct labor is comprised of: - CORRECT ANSWER-Actual cost of labor payroll
If "2%, 10; net 30" or "2% prox 10, net 30," appear on a supplier's billing statement,
what does it mean? - CORRECT ANSWER-A 2% discount is given if the bill is paid by
the 10th day, otherwise the bill is to be paid in full by the 30th day
What is Long-Term Liability? - CORRECT ANSWER-Any debt that extends for more
than 1 year
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? - CORRECT
ANSWER-General and administrative costs
Employers must report and pay federal unemployment (FUTA) tax to which agency? -
CORRECT ANSWER-Internal Revenue Service
Deduction of taxes that reach the ceiling, such as social security tax, occur when: -
CORRECT ANSWER-Wages reach that point, the deductions (or withholdings) will stop
Which method of accounting is recommended for a construction business? - CORRECT
ANSWER-Accrual basis
BRAINSCAPE1
, BRAINSCAPE1
Working capital is defined as: - CORRECT ANSWER-Total current assets minus total
current liabilities
What is considered a variable cost to a contractor? - CORRECT ANSWER-Construction
material
FICA taxes are: - CORRECT ANSWER-Paid by both the employer and employee
Although employers report social security (FICA) tax to the IRS, what are the
appropriate shares paid by the employee and employer? - CORRECT ANSWER-50%
employer and 50% employee
If John, a contractor, decides to take out a loan to pay for a truck, he should obtain a: -
CORRECT ANSWER-Intermediate term loan to be paid in 1-7 years
The term "net worth" on a corporate balance sheet represents: - CORRECT ANSWER-
The claim of the owners on the assets of the business
Which of the following shows how far past-due each customer's payment is? -
CORRECT ANSWER-Accounts receivable aging report
Which of the following items is listed as a current asset on a balance sheet? -
CORRECT ANSWER-Accounts receivable
Which of the following statements best describes the difference between the balance
sheet and income statement? - CORRECT ANSWER-The balance sheet shows net
worth at a particular point in time, while the income statement shows profit earned over
a period of time.
The key functions of a business plan are: - CORRECT ANSWER-Planning/forecasting
tool, loan or investor document, benchmarking/management tool
If an $8.30 discrepancy emerges between debits and credits, what should the
bookkeeper do? - CORRECT ANSWER-Find the error, no matter how long it takes
Which of the following will allow employers to keep track of products and services
purchased? - CORRECT ANSWER-Purchase order form
To keep accurate accounting records, it is recommended that the contractor: -
CORRECT ANSWER-Hire a bookkeeper or CPA to maintain accounting data
Liabilities are broken down into two major categories: - CORRECT ANSWER-Current
and long-term
Contracts, sales receipts and disbursements should be kept at LEAST: - CORRECT
ANSWER-5 years
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