The type of insurance that covers claims made after the policy expires or is canceled is
Occurrence
Which of the following types of business organization is associated with double taxation?
C- Corporation
Which of the following policies will increase the coverage limits and expands coverage of a Commercial General Liability Policy?
Umbrella Policy
Which of the following is not a current asset?
Accounts Payable
Working Capital is
Total Current Assets - Total Current Liabilities
Cost of Sales on an income statement would not include
Office Rent
The Current Ratio is used to measure?
Liquidity
Sam is a general contractor who owns Sam's Remodeling. Sam is currently operating a sole ownership. Sam is planning on retiring at the end of the year. Which of the following statements is true?
Sam's license will be cancelled
Which of the following summarizes revenue, cost of sales, and operating expenses over a period of time?
P & L Statement
Which of the following financial ratios is the strictest measure of liquidity?
quick ratio
Your employee does not follow building codes and damages plumbing pipes that cause tens of thousands of dollars in property damage. What is your best course of action?
Claim the damage on your general liability insurance
The best way to minimize insurance cost without increasing risk is too
Compare premiums and coverage annually
If a contractor has temporary cash-flow problem, what is a good way to get through the crisis?
Use funds from a pre-established line of credit
In reference to the balance sheet, current liabilities are debts that become due within
1 year
Of the following which is the best description for accounts receivable?
Money due from customers who have purchased goods or services
The bottom line of the Income Statement shows
Net Profit or Loss
To whom do you report and pay Use tax?
Board of Equalization
Which of the following are the best examples of fixed expenses?
rent, truck payment and insurance
Current liabilities on a balance sheet are debts that become due within
1 year
An income statement shows
Revenues and expenses over an extended period of time
In the cash system of accounting, a transaction is recorded or posted
When the cash changes hands
Which of the following is a correct statement about budgets?
A budget should allow leeway for month to month variations
If a contractor has a temporary cash-flow problem, what is a good way to get through the crisis?
Use funds from a pre-established line of credit
Greg is looking to purchase an insurance policy. He is calling different companies to obtain different quotes. What is the best way to choose among different companies?
Coverage and Cost
The bottom line of the P & L statement shows
Net Profit or Loss
A licensed contractor wants to do construction projects with an unlicensed individual. Of the following, which is a legal alternative?
They may form a corporation and obtain a corporate license
A contractor wants to change a sole ownership license to a corporate license. The contractor must
Apply for a new license with an exam waiver with the CSLB after incorporating
Which of the following best describes operating capital?
Total current assets - total current liabilities
Which of the following methods of accounting is not recommend for contractors?
Cash Basis of accounting
A contractor is looking for an insurance policy to cover a high degree of exposure to risk. Of the following, which policy would be best for this purpose?
Umbrella Policy
Which of the following financial ratios includes your inventory value?
current ratio
Frank is going to his nearest branch to open a bank account. The representative is asking him for an EIN. Where can Frank obtain his EIN?
Internal Revenue Service
Once a budget is finalized, the
The contractor should try and stay within his budget
Which of the following is not considered a direct cost?
Marketing Expenses
LLC are required to post a bond of
$100,000