Arkansas Business and Law

What is a quick ratio and what is it used for

AKA Acid Test Ratio calculated by dividing the current liabilities into the current assets minus the inventory (Current Asset-Inventory)/Current Liabilities Used for creditors Higher number = strong financial position

What are capital or fixed assets

AKA Property and Equipment assets needed to carry on the business of a company and are not normally consumed in the operation of a business Examples: land, buildings, equipment, and furniture

What are operating expenses

AKA indirect costs general items that contribute to the cost of operating a business

What is an income statement

AKA profit and loss statement a summary of the business's expenses and revenues over a given period of time

What is the income tax form for an S Corp called

AR 1100S

What is the income tax form called for corporations called

AR1100CT

What are some appropriate questions that will help you find the right employee

Ability to work with other members of a construction team ability to handle conflict expectations of the job (salary, benefits, working hours, etc) past work history and reasons for leaving level of skill and expertise training and education safety record ability to solve problems knowledge of your company questions about the job

What is indemnification for risk allocation

Absolves the indemnified party from any payment for losses and damages incurred by a 3rd party

What are changes made to a contract prior to award called

Addenda

What is the liquidity ratio and what is it used for

Aka the current ratio calculated by dividing the current liabilities into the current assets determines if the company can pay its current debts. If the company is greater than a 1 then it has positive liquidity ratio. The higher the number the greater the liquidity ratio

What are liabilities

All debt and obligations owned by the business.

Who owns the assests in a partnership

All general partners

Who has liability in a partnership

All general partners have personal and unlimited liability, and are also responsible for the actions of the other partners when acting under the company. Limited partners have no personal liability, and are only liable for previously agreed up on contribution or investment to the business

Which materialmens liens have priority

All have equal priority regardless of date filed.

What is one of the enforcement standards of all establishments covered by the Osh Act

All subject to inspection by OSHA compliance safety and health officers (CSHOs)

What is the cost comparison method

An approach that combines the completed contract and percentage of completion methods. A 10% deferral election is allowed in the method. This elections allows you to defer recognized revenue on a contract until the total costs incurred equals the 10% of the estimated contract cost. After exceeding 10%, all costs incurred are treated as period costs. Revenue is recognized based on completion.

What is a transaction

An event that either increases or decreases an account balance

What is OSHA Form 301

An individual incident report that provides added detail about each specific event

What is OSHA form 300

An injury illness log with a separate line entry for each recordable injury or illness

What are work hours as defined by the FLSA

Any time an employee is required on the premises, on duty, or at a prescribed work place.

Who certifies the progress payments

Architect by confirming the information in the progress payment estimate

Who are the exemptions for a commercial contractor's license on a job $50,000 or more

Architects and Engineers Manufactures Subcontractors if registered with the board Federal Government Contracts

What is key to finding the right employees

Asking the right interview questions

Schedule acceleration for risk allocation

Assignment of cost to complete the project ahead of schedule . Typically if the owner requests the acceleration, owner covers cost. If schedule accelerates due to delays that contractor caused, contractor covers cost.

What is the foreman

Assists the superintendent with daily project operations.

How is social security tax calculated

At the current prevailing rate. Employers pay equal amount as employees

What is calendar scheduling

Can be done on a regular desk calendar. Simple method of penciling dates on a regular calendar

How is a partnership formed?

Can be through oral agreement but written is strongly recommended

When school is in session what are the working restrictions of a 16 or 17 year old

Cannot begin work before 6 am, work past 11 pm, work more than 10 hours per day, more than 6 days a week or 54 hours per week

What are the 2 methods of accounting

Cash method and the accrual method

List some examples of source documents

Cash receipts credit card receipts customer invoices purchase orders material invoices deposit slips time cards

Who registers the names of General Partnerships and Sole Proprietors

Circuit Clerk

What is the penalty to for Failure to Abate prior violation

Civil penalty of up to 7,000 dollars per day violation continues beyond prescribed abatement date

What is one of the most important aspects of legal interpreting of contracts

Clarity of language

Name types of insurance and minimum coverage for each one

Commercial General Liability including premises- operations products/ completed operations, contractual insurance, Property damage, independent contractors, and bodily injury ( min coverage $3,000/$3,000) Automobile Liability (owned, not owned, and rented) min coverage $3,000,000/$3,000,000 Workers compensation and occupational diseases (min coverage is as required by applicable laws Employers Liability $3,000,000

what are the disadvantages of a C Corporation

Complex/ Expensive Limitations on corporate activities and decisions extensive regulations double Taxation

What is the project life cycle

Contract awarded preconstruction phase construction phase job completion and closeout

What is the claims procedure for the claim resolution process

Contract may specify procedure. Most oftenly defers the architect to initially resolve claims. If not, the contractor and owner may proceed to mediation. If mediation fails, then it is arbitration.

What is the allowed time for arbitration

Contract should specify. Typically 30 days from the time an architect made their decision

What are the penalties for deposits made 1-5 days late

2% of tax liability

What are the working hours of a minor 14 or 15 permitted by federal law

3 hours a day on school days 18 hours a week during school weeks 8 hours a day on no school days 40 hours a week when school is not in session

How long should the confirmation of receipt for the lead packet be kept on file

3 years

How long must exposure records be maintained by the employer

30 years

What does liability insurance protect from

3rd party claims that arise from alleged negligence resulting in bodily injury or property damage

How long must employment tax records be kept

4 years minimum

What is the payment bond amount for a federal construction job valued between $1-$5million

40% of contract

How long must OSHA forms be kept

5 years from the year the pertain to

What is the penalty for deposits made 6-15 days late

5% of tax liability

What is the payment bond amount for a federal job over $1,000,000

50% of contract

When can a 14 or 15 year old minor begin a shift

7 am or later

When is a notice required for commericial contractors to provide to property owners

75 days from the last day materials were delivered or services were performed

What is a balance sheet

A basic financial statement that gives the owner good insight into growth and stability of the company. It is compromised of assets, liabilities, and owners equity

What is required to hire a minors under the age of 16?

A certificate of employment (aka workers permit)

What is a change order and what is it used for

A change order is a written agreement between the owner and contractor to change the contract

What are technical specifications typically organized by

A classification system like csi masterformat

What is the penalty for performing commercial work with out a $10,000 contractor's bond

A fine up to 5% of the job

What is OSHA Form 300 A

A form that summarizes previous years injuries and illnesses that are work related that must conspicuously be posted in the work place

What must the notice from commericial contractors to property owners include

A general description of work performed or materials furnished, the amount due and unpaid the name and address of the person furnishing the labor, service, or materials the name of the person contracted for the purchase of materials, labor, or service a description of job site sufficient for identification The specific statement in bold type

Why is monitoring the budget so important

A job that was estimated correctly can turn into a loss

What a chart of accounts

A numbering system that organizes account types

What is a limited partnership?

A partnership with at least one general partner AND at least one limited partner. Limited partners have limited liability in the company

What is 1/10 Net 30

A payment term that determines a 1% discount to payments received within 30 days after receiving the invoice

What is a workweek according to the FLSA

A period of 168 hours during seven consecutive 24 hour periods. They may begin on any day of the week, and at any hour of the day.

What is a unit price contract

A price per unit is calculated for each item and the contractor is paid according to the actual quantities used

What is a bond

A risk transfer mechanism between a surety bonding company, the contractor, and the project owner

What is the accounting cycle

A series of events that is repeated each reporting period

What is a material breach

A serious violation of contract that usually ends in litigation and voids the contract.

What is a joint venture

A special business arrangement where 2 or more businesses undertake a project

When should you file a lien and what is also called

A statement of account and within 120 days of the work being done or materials being provided

What should the affidavit of notice with the legal description of property being charged with the lien include

A sworn statement evidencing compliance with the notice provisions of lien laws, a copy of all notices given to owner and a copy of proof of service such as green card

What is an adjustable trial balance

A tally of all ledger accounts after any and all adjustments are made

What is a trial balance

A total of all the ledger accounts

What is lead considered

A toxic and hazardous substance that can cause lead poisoning

What is a lump sum contract

Contractor agrees to complete the project for a predetermined price and the contractor assumes all risk

What do construction project managers do

Coordinate and plan the construction projects to meet overall goals of the project and serve as the main contact with the owner

What must be filed by employers by February 28th

Copy A of W-2 and W3 to SSA

What copies of the W-2 should employees receive

Copy B, C . And 2

how is a corporation taxed

Corporation pays taxes on its profits/earnings; then if those earnings are distributed to shareholders in the form of dividends, taxes are paid on the earnings a second time when the shareholder pays income taxes on the dividend paid ( also called double taxation)

what are the 4 requirements of a contract to make it binding

offer and acceptance consideration competent parties legal purpose

what are some examples of company overhead

office rent accounting fees taxes phones legal fees administrative labor

When are you legally bound to what you agreed to

once the offer is made and agreed to

What is the compensation from employers to employees who work over 40 hours per week?

one and a half times the regular employment rate

What is an entrepreneur?

person engaged in strategic activities that involve the initiation and development of a new business created to build long-term value and steady cash flow streams

What is the best way to determine material cost using the quantity take off method

plug it in to your estimating framework

What are the most common 2 reasons businesses fail?

poor management and inadequate management

what is a subcontractor bond

protects the general contractor in the event that the subcontractor does not perform or pay for labor and materials

What are payment options in the event of default on a contractor's contract

provide additional financing arrange for new contractor pay out amount of bonds

how should the finances of a C corporation be managed

separate bank accounts and separate business records corporation owns the money and shareholders pay to buy the corporations stock, all assests, and money earned by corporation

what are the advantages of a C Corporation

separate legal entity limited personal liability unlimited business life available capital transfer of ownership through stock sales

What circumstances are best for renting equipment

short term specialized projects replacement for equipment being repaired equipment with high maintenance cost jobs that require transportation and storage to distant locations

what is an offer in a contract

specifically outlines the obligations of a contract including the work to be done and the compensation

what is the square foot method

square footage x unit cost

What replace the Heard Act in 1935?

the Miller Act

What happens if a contractor defaults on an agreement with a bid bondm

the bid bond can be used to make up the pricing difference with the next lowest bidder.

What happens if a general partner leaves or dies

the business dissolves and all assests must be sold or distributed to first pay creditors and then the remaining partners

What is company overhead

the cost of doing business that keeps the operation running

what is cost based pricing

the cost of the project is determined through the cost estimate and an overhead percentage, plus a markup percentage. The markup percentage is divided into the direct costs of the project.

What is the Miller Act

the current law requiring performance and payment bonds on all federal construction projects valued at greater than $100,00

who has the liability in a corporation

the entity itself. owners are not personally liable

Who bears the liability in a sole proprietorship?

the owner

What is negotiation

the process where the owner and contractor have made an agreement on price and terms of cntract

What are the conditions required to enforce State Statue 22-9-404

the subcontractor is the lowest bidder the general contractor is required to list the subcontractor in the bid, or tthe contract value is over 50K

Why is adding company overhead to your bid important

to cover costs

What does state statue 22-9-404 give contractor the right to do

to require subcontractors to obtain a performance and payment bond or cash bond equal to the amount of the bid in certain public construction projects

What is inland marine/ equipment theft insurance

type of insurance that you can purchase for your tool sand equipment; also provides coverage for goods in transit and projects under construction.

why are contigencies added and what are they based off of

unexpected problems or conditions that arise during project based off risk level of project

what are the disadvantages of a partnership

unlimited liability multiple decision makers limited life of business changes to partners or agreements may prove difficult if partner dies, company dissolves

What are the disadvantages of a sole proprietorship

unlimited liability less available capital possible difficulty with loans dissolution with owners death'

What happens if your mark up is too low

you may not cover your costs to complete the contract, causing you to break even or lose money

How is a sole proprietorship taxed?

you must report all business income or losses on your personal income tax return; the business itself is not taxed separately.

what should products and services in a business plan include

your specific products and services, primary subcontractors and suppliers, the effect of technology on your business and expansions opportunities

what should a market analysis include

your target market, market trends, and major competitors+

Does theft raise insurance premiums

Yes

Is Arkansas a right to work state

Yes

Should hours spent planning and scheduling be included in labor cost equation

Yes

Can a trade name be filed as a trademark and at what level can a trademark be filed

Yes state and federal

Can a corporation do business under a fictitious name

Yes if first filed with the state Domestic corporations must also file with the county clerk unless located in Pulaski County.

What is the advantage of calendar sceduling

You can link project tasks to specific date such as dates of other projects delivery date of materials payment schedules employee vacations and holidays

What happens if there is a conflict of specifications and codes?

You must follow the stricter of the 2

If you are working with Asbestos, what are you required to do

You must have your site inspected by an asbestos-certified inspector prior to construction. You must submit a written notice of intent 10 working days prior to construction to your local pollution control agency and the EPA

What is a $10,000 contractor's bond

a bond that must be filed with Contractor Licensing Board as one of the conditions to obtain a commercial license.

what is a business plan

a living documents that changes as your business and the market changes

What is a partnership

a relation between 2 or more persons who can join to carry on a trade or business

What happens if changes to a bid package is made before it is due

an amendment is made

What does a bid package include

an invitation that contains specifics of how bid should be completed and submitted bid forms including bid sheet, bid schedule, bidders questionnaire on experience, financial responsibility, and a copy of the contract supplements including items important to the overall bid process such as survey and soil analysis

How long does a partnership last>?

as long as agreed and all general partners remain

how long does a corporation last

as long as shareholders determine it, lasts even in the event of shareholder death

What is a completion bond

assurance to financial backers of construction will completed on time

what is the unit price method

bundles all cost factors such as labor, materials, subcontractors, equipment, etc to determine unit per foot multiplied by the square footage of project

How do you calculate equipment cost when using owned equipment

calculate unit cost by using the following factors: actual value of equipment maintenance operating cost taxes and fees labor to operate including training and licensing insurance

What should the contract provisions be and what are the key provisions

clear and concise Payment and price terms obligations of parties supplemental conditions breach of contract

what should a company summary include

company vision mission legal structure management personnel business location facilities

What are the other methods of estimating

conceptual estimating square foot method unit price method

What should a cover page include

contact information and a confidentiality statement

What is a labor burden and what does it add to your labor cost on average

costs such as employment tax and insurance and typically adds 30% to your labor costs

what is a fidelity bond

covers business owners for losses due to dishonest acts by employees

What is the first step of building an estimate

define the phases

What are specifications

details that determine the type of materials or methods to be used.

what should an executive summary include and where is it located

directly after the cover page at the beginning includes highlights of the plan and gain interest of reader. Usually written last

What are direct costs

Costs directly associated with the project you're working on

What are the elements of a business plan

Cover Page, Executive Summary, Company Summary, Products and Services , Market Analysis, Marketing Strategy, Financial Plan

What is the National Pollutant Discharge Elimination System

Created by the EPA in 1990 to minimalize polluted storm water discharges i from 10 categories of industrial activity

What formula do you use to determine the amount over or under cumulative earnings for Billings

Cumulative Earnings - Amount Billed to date

What is the equation for working capital

Current assets - current liabilities= working capital

What are liquidated or stated damages

Damages written in to the contract

What should the statement of account contain

Date of filing name of the person laying the lien amount of the lien name of the person against whose property the lien is filed a just and true account of the demand due or owing to him after allowing all credits. A correct legal description of the property to be charged verified by an affidavit. Attached affidavit to the effect that all notices have been given to owner

When should the ADEQ be notified

Demolition ( burning, wrecking, taking out whole building even if there is no asbestos present) Renovation: ( if disturbes friable asbestos containing material in excess of 260 linear feet of pipe or 160 square feet of other building materials.

How should you start a critical path schedule

Determine the sequence of the tasks and the activity duration. The outline the relationship between tasks, simultaneous events, and the critical path.

What does the Americans with Disabilities Act (ADA) of 1990 prohibit

Discrimination against persons with disabilities

What are the requirements of an S corp

Domestic corporation with one class of stock No more than 100 Shareholders who are legal citizens all shareholders must consent use of a permitted tax year filing IRS form 2553 file franchise tax every year

When should the preliminary cash flow budget be completed and why

During the scheduling phase to anticipate any cash shortages

What does EIN Stand for

Employer Identification Number aka taxpayer identification Number

What is required by the employer if there is a work related fatalities or 3 or more employees are hospitalized for a work related injury or illness

Employer must orally report to the nearest OSHA office within 8 hours If a death occurs within 30 days of the event, employer must report within 8 hours of notification

Who is responsible for FUTA

Employers

What are the specific criteria for the construction industry outlined by the Arkansas Workers Compensation law requiring coverage

Employers engaged in building or repair work that has 2 or more employees Contractors who subcontract with one or more employees Subcontractors who have one or more employees

What does AR Code Ann 11-9-401 require workers compensation coverage

Employers engaged in building or repairs with 2 or more employee are required if the employer is a contractor who subcontracts and has one or more employees required if the employer is a subcontractor with one or more employees required

What employers does the ADA apply to

Employers with 15 or more employees

Who is exempt from record keeping for OSHA

Employers with less than 10 employees certain low hazard occupations like retail, financing, insurance, real estate, and service sectors

Who does the Fair Labor Standards Act (FLSA) apply to?

Employers with one or more employees.

What are the owners obligations

Ensuring prompt approval of all plans and specifications ensuring project meets zoning specifications issuing payments according to the specified schedule of progress payments paying for all required permits, assessments, and charges required by the public agencies and utilities furnishing all surveys and recording plats and a legal description of the property providing access to the construction site in a timely manner

What is the Family and Medical Leave act (FMLA)

Entitles eligible employees of covered employers to take up to 12 weeks of job protected unpaid leave each year, with the maintenance of group health insurance for birth and child care, placement of adoption or foster care, for the care of a child, spouse, or parent with a serious health condition, or for the employee with a serious health condition

How does licensing protect the safety, health, and welfare of the public

Entrance Requirements: ensures min set of qualifications (ie experience/training) Standards of Practice: required to adhere to standards of practices established by law and ensures appropriate level of quality Disciplinary Authority: Statues & rules define illegal and prohibited activities.

What are some examples of employees that are covered by the ADA

Epilepsy paralysis HIV INFECTION AIDS substantial hearing or vision loss mental retardation specific learning diabilities

What does the ADA require

Equal opportunity in selecting, testing, and hiring qualified applicants with disabilities job accommodations for applicants and workers with disabilities when such accommodations would not impose undue hardships equal opportunity is promotions and benefits

What factors should you use determine the unit cost of rented equipment

Equipment rental rate labor cost to pick up and return equipment labor cost to operate equipment operating cost such as fuel

What is the Clean Water act and what does it do

Establishes the basic structure of regulating discharges of pollution into the waters for US and makes it unlawful for any person to discharge any pollutant from a point source into navigable waters, unless a National Pollutant Discharge Elimination System (NPDES) was obtained under its provisions

Who does the state statue designate lien rights for

Every contractor, subcontractor, and material supplier who supplies labor or materials or machinery in the construction or repair of an improvement to real estate Every manufacturer who furnishes to any land owner any soil or drain tiles or pipes of tile for his or her land or puts in soil or drain tile for any land shall have a lien for each tract 40 acres or less that services were provided every architect, engineer, surveyor, appraiser, landscaper, abstracter, or title insurance agent who shall do or perform any services by virtue of a written contract or agreement with owner or owners agent

When must w-4 forms be filled out

Every year by February 15th

What employees are exempt from the overtime pay provision or minimum wage requirements from the FLSA

Executives Administrative personnel Professional Employees Outside Sales Employees Employees in certain computer-related occupations

What are some engineering controls to limit exposure to lead

Exhaust ventilations such as power tools with dust collection shrouds or other attachments exhausted through a high particulate air vacuum system (HEPA) enclosure or encapsulation of lead particles (for example lead based paint can be made inaccessible by encapsulating it in a material that bonds to the surface like epoxy coating) substituting lead based materials or products that create lead exposure with compatible products

What are the advantages of a partnership

ease of formation, direct profit rewards, larger management

what is a conceptual estimate

estimate prepared by architects using previous cost models from previous projects

What is a C corporation

gives your company a legal exsistence ( can own assests and conduct business in its own name.

what is a lien bond

guarantees liens can not be place on owners property by a contractor for payment

What is a performance bond

guarantees that a contractor will complete the job within the agreed time frame and conditions

What is a maintenance bond

guarantees that for a stated period (typically 1 year) that no defective workmanship or material will appear

What is a bid bond

guarantees that the contractor will do the work at the submitted bid price, enter into a contract with the owner, and furnish the required payment and performance bonds. Serves as a deterrent to unqualified and frivilous bidders.

what is a payment bond

guarantees the subcontractors and suppliers will be paid for work performed on property under contract

What does a job cost recording system help witjh

helps with future estimates by creating more accurate unit costs

What is another helpful tool in determining labor cost per task

historical data (cost of labor on past jobs)

how do you calculate unit cost for owned equipment

hours used per year divided by yearly cost of equipment

When does an offer expire

in a reasonable time that is determined by court interpretation and is considered on an individual case basis

What is an emergency actions plan and who regulates it

includes procedures for reporting a fire or their emergency, emergency evacuation employees who remain for critical operations before evacuating accounting for all employees after an evacuation employees performing rescue or medical duties

How do you perform the quantity take off method

individually estimate the units of materials and labor for each task listed in your estimated framework

What happens if the residential contractor fails to give the owner a preconstruction notice prior to construction

it is a crime and contractor may not avail themselves of a materialmens liens

why is accurate estimating important

it is important to the profitability to the construction company

What is a bank letter of credit

it is not a bond. cash guarantee to owner. Not a guarantee of performance but can be converted to a payment to owner by a bank or lending institution. does not cover the whole contract, typically 5 to 10 %

What are project overhead costs and provide examples

items necessary to complete the project but are not directly associated with labor and materials such as bonds or temporary offices

What are allowances

items not specified in project plans ( fixtures, lighting, carpet) should be added based on owners budget

What is a contract

legally binding agreements between 2 or more parties

What are common errors that lead to inaccurate estimates

mathmatical errors omissions in labor or materials nonstandard abbreviations units of measure

What are the advantages of a sole proprietorship

minimal legal restrictions simple ownership low start up cost sole owner of profit decision making freedom

what are the legal requierments of a contract

must be possible to perform not intended to harm anyone and must not require illegal activities

What does AR State Statue 22-9-203 require of contractors

must present a 5% bid bond or certified check in the amount of 5% of bid that shall accompany all submitted bids valued greater than $20,000.00

if you have an agreement with a customer, does that mean you have a contract

no

What are two common shipping terms used when shipping is charged

FOB Freight Prepaid ( seller pays) FOB Freight Allowed (buyer pays and seller invoice is credited)

What is the only federal employment tax that is NOT with held from employees

FUTA

What is FUTA

Federal Unemployment tax act - pays compensation to workers that lose their jobs

What does the Arkansas Secretary of State, Business and Commercial services allow you to file for your business?

File articles of organization or incorporation determine name availability for corps & LLCs File foreign entities seeking authority to transact business application File Annual Reports

What is multiple prime contracts contracting method

For large construction projects that a contractor may contract with 2 or more other contractors to complete the job

What are some examples of risk allocations

Force Majeure indeminification differing site conditions warranties or guarantees delays and extensions of time schedule acceleration artistic changes

Who generally supervises a specific trade area

Foremans

What form can you file to deposit employment tax quarterly and what is the liability requirement

Form 941- if liability is less then 2500 dollars

What are the list of forms required for employee documentation and what are they for

Form I-9: legal status IRS Form W-4: Federal Tax Witholding State Tax form: State tax withholding Employment Application: basic information with signature Policy Sign Off : accept policies Emergency Notification Form

What documents are in contract provisions

Form of agreement general conditions/ obligation supplemental conditions change orders index of drawings

What is all risk builders insurance

Form of property insurance that covers property owners and builders for buildings under construction. Typically covers machinery, equipment, materials, supplies, and fixtures that are apart of the structure

What 3 specific requirements did the Construction Industry Payment Protection Act of 1999 pass

General Contractor of a project must obtain a payment bond in an amount equal to contract price unless contracting officer deems other amount adequate subcontractors are permitted to notify contractors of intent to sue by any means which provides written and 3rd party delivery Waivers of Miller Act payment bonds are void before work begins. Any waiver of a subcontractor's right to sue must by in writing, signed, and executed after the subcontractor has furnished labor and material for use in job.

How must corporations file their income taxes

Generally estimated tax payments if estimated over 500 dollars. Must deposit the payments electronically, through mail, or delivery with payment coupon

What are a contractor's obligations

Having proper licensure securing building permits ordering all materials and supplies and arranging site delivery furnishing all labor including obtaining required subcontractors to complete the job completing all work in compliance with all applicable codes and scheduling inspections on a timely basis completing all work according to plans and specifications keeping the construction site clean and removal of debris during and upon completion of job

What are some questions that are deemed inappropriate and could possibly lead to legal action

How old are you do you have any disabilities are you pregnant are you married do you have children what is your religious affiliation what is your sexual orientation what ethnic background are you

What does the immigrations and nationality act require from employers

I-9 forms must be completed with required documentation within 3 days of hire

What must the notice of preconstruction start with

IMPORTANT NOTICE TO OWNERS

What is circular E

IRS Publication Circular E: Employers Tax Guide is a comprehensive reference providing instructions through calculating, withholding, and depositing federal employment taxes

What are the exceptions to the restriction for a 16 or 17 year old minor

If they are graduated, married, or a parent

what should a financial plan include

If you already have financial statements you should include balance sheet, an income statement, and a cash flow statement, You may include financial projections as a bonus

What are the benefits of electing an S Corp

If you are an eligible domestic corporation, you can elect to be treated as an S corp under sub chapter S of the internal revenue code. This allows you to avoid double taxations.

What are the requirements for a monthly depositor for federal employment taxes

If your total payroll tax liability is less than 50,000 for the previous 4 quarters

What is the critical path method

Illustrates the interdependent relationships of tasks. (Flow chart)

How should you state terms in a contract

In plain language

What can construction sites contribute to streams and in what amount of time

In short amount of time construction sites can contribute more sediment to streams than can be naturally deposited over several decades

Where are the accounts located

In the general ledger

how should you maintain your emergency action plan with 10 or more employees

In writing

What is the completed contract method

Income or loss is reported in the year that the contract is completed. Direct materials, labor costs, and all indirect costs must be allocated or capitalized to the same account as the income or loss

What are the 3 types of federal tax

Income tax Sel Employment Tax Employment Tax

What is the profit equation that provides the basis for the income statement

Income-Cost of Goods Sold= Gross Profit Gross Profit- Expenses= Net Income

What happens if an immaterial breach of contract occurs

Injured party may only sue for the value of the damages that occurred

What is an Equipment Floater Policy

Inland marine insurance for direct physical loss to equipment and is designed to cover mobile equipment while it is stored on site, in transit, or at temporary job sites.

What are some examples of Asbestos containing material

Insulation ( rolled, blowed, or wrapped) Resilient floor coverings(tile) Asbestos siding shingles Asbestos roofing products Vermiculite insulation

What documents are in bid documents

Invitation to bid bid instructions bid forms supplements addenda

What happens if a lien is filed by a person that is not the contractor

It is the duty of the contractor to defend the action and the owner at the contractor expense. The owner may withhold payment while the action is pending

How is retainage calculated and withheld

It usually calculated by a percentage (most commonly 10%) and is withheld out of each progress payment

What is an asset

Item of value owned by the business

What is a current asset

Items of the value that can be converted to cash in less than one year including the cash in your bank account

when must all employees be furnished copies of their w-2s

January 31st

What is a immaterial or partial breach

Less serious violation and usually does not void the contract

What are current liabilities

Liabilities that will mature and must be paid within 1 year

How is an LLC taxed

Like an S Corp, federal income taxes are paid only on income distributed to members as ordinary income. This is useful to general partners

What are the advantages of an LLC

Limited disclosure of owners Limited documentations No advance IRS filings No public disclosure of finances Limited liability for managers and members ability to delegate management to nonmember

What did the Construction Industry Payment Protection Act of 1999 do

Made several amendments to the Miller Act of 1935. Its purpose is to improve payment bonds for persons who furnishes labor or materials for use on federal construction projects

What are the requirements of MSDS program (safety data sheets)

Manufacturers and importers of hazardous materials are required to conduct hazard evaluations of the products they manufacture or import

What are the 2 types of breach of contract

Material and immaterial (aka partial breach)

What is the penalty for failure to supply list of partier doing work or supplying materials within 5 business days from request

May be sued in civil court by aggrieved party and required to provide the information and guilty of a crime and subject to penalties of 2500 dollars

What is the activity ratio and what is it used for

Measures how effectively the company manages its credit. Revenue / days in the business year = sales per day Cost of receivables/ Sales per day= Average Collection period Lower number is better

What is the debt ratio and what is it used for

Measures the percent of total funds provided by creditors. Total Debt/ Total assets= Debt Ratio

Name examples of labor burdens

Medicare and social security federal unemployment insurance workers compensation liability insurance state unemployment insurance company benefits such as medical insurance or vacations

What was put into effect by the FLSA on July 24, 2009

Minimum Wage increased to $7.25 per hour

What are the penalties for completing a job of more than $50,000 without a commercial contractors license

Misdemeanor charge $100-$400 per day not to exceed 3% of the total job

What are changes to a contract after it is signed called

Modifications

What are supplemental conditions

Modify the General conditions of the contract and are often prepared in a separate document. They are tailored to each project, and may outline specific insurance requirements, project procedures, and local law requirements

What are the 3 deposit schedules for Federal Employment taxes

Monthly, Semiweekly, and daily

How do you determine the relationship between tasks

Most tasks are interdependent. For example you can't start framing until the foundation is poured. A CPM schedule uses this information to display which tasks are dependent on each other.

What are the requirements to be treated as a small business or under Subchapter S

Must be registered with Secretary of State elect to be treated as Subchapter S by filing Election by small business (Form 2553) with the IRS File Election of Small Business ( Form AR1103) with the state during the first 75 day of taxable year

Can a project be delayed during a claims resolution

No

Is lead abatement subject to the Lead PRE

No

Would an individual be covered under the ADA with a short term, non chronic condition such as a sprain or broken limb or the flu be covered under the ADA

No

What is OSHA's regulation of lead

No more than 50 micrograms of lead per cubic meter of air averaged over an 8 hour day

What are the penalties for failing to comply with regulations concerning lead

Non-compliance Carrie's substantial fine of 37,500 dollars per day for each violation willingful or intentional violations are subject to a fine of 37,500 dollars per day and/or imprisonment for up to one year

Can a contractor do business under a fictitious name

Not unless fictitious name is registered with the AR Contract Licensing Board

What are the 3 forms for record keeping required by OSHA

OSHA Form 300 OSHA Form 300A OSHA Form 301

What is Commercial General Liability insurance and what does it cover

Offers basic liability coverage for 4 types: Bodily injury that results in actual physical damage or loss for individuals who are not employees Damage or loss to property not belonging to business Personal injury, including slander and reputation Advertising injury, including charges of negligence that result from a promotion of goods and services

When is a commercial contracting license required

On jobs that are $50,000 or more labor and material

When are S Corp and Corp Taxes Due

On or before the 15th day of the 3rd month following the close of an s corps tax year

What is the rate for Arkansas Unemployment Coverage and how is it computed

On wages paid to each employee on a calendar quarter basis tax rates change every year check with local unemployment office for current rate

How many owners does a sole proprietorship have and who owns the assests?

One Sole Owner- company owns everything. License terminated at death of owner

Describe the ownership, liability, formation docs, tax, and management of a sole proprietorship

One owner unlimited liability DBA Filing Entity not taxed. Profit/losses claimed on personal owner

What are the most common ways of breach of contract

One refuses to perform contract performs an act prohibited in contract prevents other party from performing contract

What is a preliminary cash flow budget

Outlines the stages of construction with anticipated revenues and expenditures

Who can ask for a list of parties doing work or supplying materials

Owner, material suppliers, subcontractors, or anyone interested as mortgagee or trustee

What are progress payments

Partial payments made after specified phase is completed

how should financials be managed in a partnership

Partners should keep separate bank accounts and financial records for business. Outside accountant is strongly recommended

What is Social Security and Medicare Taxes

Pay for benefits that workers and their families receive through the Federal Insurance Contribution Act/

What are the requirements for a semi weekly depositor for federal employment tax

Payroll tax liability for the previous 4 quarters is greater than 50000

What are the requirements for a daily depositor for federal employment taxes

Payroll tax liability greater than 100,000

How do you calculate the earning for the percentage of completion method

Percentage of completion x Contract amount= Cumulative Earnings

What are the surety amounts required for federal construction jobs by the Miller Act

Performance bond in an amount the contracting officer deems adequate (typically 100%) Payment Bond in an amount that varies based on the size of the contract

Who does the ADA apply to

Persons with major impairments that substantially limit major life activities

What did the EPA put in place with the NPDES in 1999

Phase 2 of the NPDES that brought out to major permittees: Construction sites that disturb one acre but less than 5 acres with possible exceptions allowing a waiver Small municipal separate storm sewer systems (MS4)

what are the 3 key functions of a business plan

Planning tool loan or investor document benchmarking tool

What are the top reasons that businesses fail?

Poor Sales Competitive Weakness High Operating Expenses Difficulty Collecting invoices inventory too many fixed assests poor location fraud

What are the responsibilities of a construction project manager

Preparing the budget reviewing the shop drawings determining labor requirements and preparing schedules monitoring the overall progress of the project and preparing job records monitoring the compliance with building and safety codes ensuring proper handling of change orders regularly meeting with owners, trade contractors, architects, and other design professionals on tracking project progress

What is the formula to estimate materials using quantity take off method

Price per Unit x # of units needed= total material unit cost

What does the Arkansas State Statue 17-25-311 require for a joint venture

Prior to a joint venture engaging in or offering contract work in Arkansas each contracting party shall be properly licensed or a proper contracting license be obtained in the name of the joint venture

What is the formula for the percentage of completion method

Project Cost Incurred / Total estimated Cost= Percentage of completion

What are the key elements for a successful project outcome

Project manager who understands the total project as a big picture early preparation and planning good management and front line supervision effective responses to problems and changes active customer involvement good communication skills

What does the type of schedule you use depend on

Project size complexity and location

What is a source document

Proof that the transaction took place

What can lower the occurrence of injuries on the job

Proper safety equipment

What is Delays and Time Extensions for risk allocations

Provides a contingency in case the completion deadline is not met. Delays at no fault to contractor such as severe weather are generally not considered a breach

What does workers compensation cover

Provides coverage for employees injured on the job

What is the Arkansas Workers Compensation law

Provides monetary benefits to employees that are injured on the job

What can excess sediment do to our environment

Quickly fills rivers and lakes, requiring dredging and destroying aquatic habitats

What is the percentage of Completion method

Recognizes income as it is earned during the construction project

What is working capital

Refers to the amount of cash available after all liabilities or debts are paid.

How do you use the accrual method of accounting

Report income in the year the services occur, not when you collect the money. Same for expenses.

How do you use the cash method of accounting

Report the income in the same year that you received it. Deduct the expenses in the same year you received them. Easier method of the two

What is the formula for determining labor cost per task in your estimating framework

Required Labor Hours x Labor Rate= Labor Cost Per Task

What documents are in supplemental forms

Required bonds and certificate of insurance

What are safety data sheets

Requirements of OSHA Hazard Communication Standard to ensure chemical safety in the workplace

Who has the liability in an LLC

Resembles a sole proprietorship in the way that it does not protect against personal actions; however, there is some protection from actions taken by other members or company.

What do employers do with copy A of the W-2

Send it and the entire page of w-3 for to the SSA by the last day of February or the last day of march if you file electronically

How do employers pay and report FUTA

Separately from fica and withheld income tax.

What is a limited liability company

Shares characteristics of both sole proprietor and corporation Must consist of at least one member, and ownership is invested in memberships rather than stocks.

What is bar scheduling

Shows the activity duration and sequence of tasks to be completed. Easy to read visual showing a graphical depiction of the schedule in its entirety

What measures can be taken to minimize erosion and sedimentation on construction site

Silt fences or hay bales placed at the down gradient side of the construction site for sediment control placing mulch and vegetation as soon as feasible to permanently stabilize the site soil for erosion control A water misting system can control dust generation

What is the turnkey contracting method

Similar to design/build. In addition to managing the construction and design team, the contractor also obtains financing and land. Under the turnkey model, the construction firm is obligated to complete the criteria but with expanded responsibilities and liability.

List all contracting methods

Single prime design/build turnkey fast- track construction multiple prime contracts partnering

What is calendar scheduling best for

Smaller, less complex projects. Not recommended for larger projects

What taxes must an employer deposit, report, and pay

Social Security and Medicare taxes ( FICA) Federal income tax withholding Federal Unemployment Tax (FUTA)

What business structure is the simplest to set up?

Sole proprietorship

What are the businesses exempt from needing an EIN number

Sole proprietorships with no employees and file no excise tax or pension tax returns LLCs with one sole owner ( where the owner will file employment tax returns)

What do the shop drawings outline

Specific materials, details, dimensions, and installation for specific items.

What documents only verify identity

State issued drivers license with photo ID card with photo issued by federal, state, or local agency. voters registration card us military card

Who generally oversees all of the daily operations

Superintendent

Who's responsibility is maintaining project records and reports

Superintendent

How do you use the straight line depreciation method

Take the initial cost and subtract the salvage cost then take that total and divide it by the number of useful life years.

How are progress payments calculated

Taking difference between completed work, materials delivered, and a predetermined schedule of unit costs

What is net profit

The difference between revenues and expenses

Who purchases workers compensation insurance

The employer, never paid by employees

What happens if a material breach of contract occurs

The injured party can sue for monetary damages for the loss suffered as a result of the breach

What happens if a contract cannot be clarified

The interpretation will go against the party who wrote it

Who produces the shop drawings

The manufacturer or supplier, subcontractor, or contractor

What is the superintendent

The onsite supervisor responsible for the daily operations

What happens if a judgement is made against the owner

The owner can deduct the amount of the judgement out of the amount owed to contractor. If contractor is already paid, the owner is entitled to recover any amount for which the contractor was liable

What is depreciation

The process of devaluing a fixed asset as result of aging, wear and tear, or obsolescence's. Over the course of its useful life

What is the critical path

The sequence of tasks that determines the duration of the project

What is float time

The time that is remaining after a task is complete before the next begins

What is the working restrictions of a 16 or 17 year old minor when school is NOT in session

There is no limit to how late they can work can not begin a shift before 6 am work more than 10 hours per day, 6 days per week, or 54 hours per week.

What is the main weakness of bar scheduling and calendar scheduling

They do not show the interdependencies of activities

What documents establish BOTH identity and eligibility

US Passport Certificate of US Citizenship Certificate of naturalization Unexpired foreign passport with I-551 stamp or attached I-94 form indicating current employment authorization permanent resident card or alien registration with photograph

What documents only verify eligibility

US Social Security Card issued by the SSA Original or certified birth certificate us citizen ID Card (form I-197) resident card Native American tribal document

Describe the ownership, liability, formation docs, tax and management of a General Partnership

Unlimited # of general partners unlimited liability General Partner agreement Entity not taxed. Profit/losses claimed on general partner tax returns General Partners

Describe LLC (table)

Unlimited # of members No liability Articles of organization, operating agreement Profit/losses claimed by members Manager members in operating agreement

Describe Limited Partnership (table)

Unlimited # of partners General Partners- all liability Limited Partners- none Limited Partner Certificate and Agreement Profit/losses claimed by partners General Partners

Describe a C Corp (table)

Unlimited # of shareholders no liability Article of Inc., Bylaws, Organized Board Resolution, Stock certificate, stock ledger Corporation is taxed and the earnings of shareholders (double Taxation) Board of Directors

Describe an S Corp (table)

Up to 100 shareholders no liability Articles of incorporation, bylaws, organized board resolution, Stock Certificate, Stock Ledger, IRS & State S corp election

What is the penalty for a willful OSHA violation

Up to 70,000 dollars with a minimum penalty of 5,000 dollars each

What is the easiest way to track your budget

Use the cost estimate and a job cost system to determine if you have any cost overruns

What is retainage

Used by owner to ensure the completion of the construction and provide protection against liens, claims, and defaults.

What is a daily report

Useful tool used to track the progress of the project and legal back up in the event of a dispute

How must you calculate income tax liability for an S Corp or Corporation

Using the same method of accounting an income year as used for federal

What does the FLSA NOT require

Vacation, holiday, severance, or sick pay meal or rest periods, holidays off, or vacations premium pay for weekend or holiday work pay raises or fringe benefits reason for discharge, immediate payment of final wage to a terminated employee

What do you use to calculate the Federal Tax withholding for your employees

W-4 form, employees withholding allowance certificate

What does the daily log list

WEATHER CONDITIONS project name / date/ location personnel on the job description of work hours worked on each task change orders progress on the job other relevant information

What is a w-2 form

Wage and tax statement summarizes the previous years wages and withholding amounts.

What does the preconstruction notice do

Warns the owners and preserves the right of material suppliers of liens on residential projects

When is a failure to abate prior violation given

When a previous violation has not been corrected

What does breach of contract mean

When one or more parties fails to perform accordingly with any of the terms and conditions in the contract

When is key man life insurance beneficial

When your company depends on specific individuals for continuing success of your business

What are the main differences in types of contracts

Who takes the risk that the work will be performed for the estimated cost who pays for cost overruns who keeps the cost savings if the project performed is less than the estimate

What are the penalties for violating the FLSA

Willful violations may be prosecuted criminally and the violator may be fined up to 10,000 dollars. A second conviction may result in imprisonment

How is it best to protect yourself with an oral agreement

With a written change order. In a legal proceeding, a written agreement always takes precedent of an oral agreement

Where must the lien be filed

With the clerk of the circuit court of the county in which the building or property is located

What is a trademark

Word, name, symbol, sound or color to represent and distinguish a company's product or services. Not the same as a trade name

What is lead abatement

Work designed to permanently eliminate lead-based paint hazards

What does social security pay for

Benefits for under old age, supervisors, and disabilities insurance part of FICA

Name the different types of construction bonds

Bid Bond Performance Bond Payment Bond Maintenance Bond Completion bond fidelity bond lien bond subcontractor bond

What is typically in a project manual

Bid documents contract provisions supplemental forms technical specifications and construction drawings

If the total cost on owned equipment is $30,000 per year, and the projected hours for the year is $1,000, what is the unit cost of the owned equipment

$30 per hour

How should you manage finances as a sole proprietorship?

Business and Personal kept separate and careful records

How is a partnership taxed?

Business, Income, and Sales Tax are the responsibility of every partner. For federal income, partners must file returns on IRS form 1065

how long can a corporate name be reserved through Secretary of State

By completing application and payment of $25 you can reserve the corp name for 120 days

What is bar scheduling similar to

Calendar scheduling

What are the 3 main types of scheduling in the construction industry

Calendar scheduling bar scheduling critical path scheduling

What is force majeure for risk allocation

"Acts of God" and other external events such as war or labor strikes. (Unexpected events)

What is the payment bond amount for federal construction jobs over $5 million

$2.5 million

What are the steps in an accounting cycle

1. Classifying and recording transactions 2. Posting transactions 3. Preparing a trial balance 4. Preparing an adjustable trial balance 5. Preparing a financial statements 6. Analyzing financial statements

What are the steps to the quantity take off method

1. determine the labor cost for each task 2. add the labor burden 3. determine the materials 4. Determine equipment cost 5. Add subcontractor fees 6 Add allowances 7. add contingencies 8. add project overhead 9. add company overhead 10. add markup and determine profit margins

What is the penalty for deposits made more than 16 days late or payments made 10 days from the first notice sent by the IRS

10% of tax liability

What is the penalty of falsifying OSHA record

10,000 dollar fine, 6 months in jail, or both

If your direct costs of your bid is 100,000, your project overhead is 9% and your company overhead is 11%, what should you markup your bid? Show math.

100,000 / 80% = 125,000

Describe an example of a chart of accounts

1000-1999 Assests 2000-2999 Liabilities 3000-3999 Equity 4000-4999 Revenue 5000-5999 Cost of Goods Sold 6000-6999 Expenses 7000-7999 Other revenue ( Interest income) 8000-8999 Other Expenses ( income taxes)

If you estimate your owned equipment cost to be $30 per hour and the project is projecting 40 hours of use what is your equipment cost for the project

1200

What is the standard industry markup

15%

What are 3 basic types of financial statments

Balance sheet income statement statement of cash flows

What must the contractor do 10 business days prior to filing a materialmens lien

Give a notice to the owner or owners agent that includes the amount for and the building or property it is imposed upon

What is a residential contractor required to do before beginning construction

Give the owner a statutory preconstruction notice.

What are some examples of safety equipment

Hard hats safety shoes/boots protective eyewear gloves fall protection hearing protection respirators protective coveralls face shields

When must a 14 or 15 year old minor end their shift

June 1st through labor day - 9 pm Labor Day - may 31st - 7pm

What helps keep inventory cost low

Just in time deliveries - allows you to time your deliveries to arrive as you need the materials to cut down on storage and reduce risk of theft or vandelism

What is the difference in taxation for an LLC with one vs multiple members

LLC with one member is taxed as a sole proprietorship LLC with more than one member can choose to be taxed as a partnership or as a corporation

What is required by federal law under Lead PRE by contractors for renovating pre-1978 housing

Lead information ( EPA packecket "protect your Family from lead in your home") given to resident before starting construction

What is the blueprint to finishing your project on time

Scheduling

What are the Right to Work Laws

Secures the rights of employees to decide for themselves whether or not to join or financially support a union.

What is Lead PRE

The Lead Prerenovation Education Rule

What is the most accurate method of estimating

The Quantity Take off method

Which method of accounting do most construction businesses use

The accrual method

What does total float time refer to

The amount of leeway allowed in starting or completing an activity without delaying the project completion date

What does Medicare tax pay for

The benefits under the hospital insurance part of FICA

What is the fast track construction contracting method

The construction process begins before the completion of contract documents. This method involves a phase approach

What is a cost plus contract

The contractor is reimbursed for the actual cost of labor and materials, and is paid a markup fee for overhead and profit

How long should the cash flow be tracked

Through the duration of the project

Where is the management assigned in a joint venture

To an individual or to one company

What is the return on assets ratio and what is it used for

To determine if the company's assets are being employed in the best manner Net profit ( after taxes) / Total Assets = Return on total assets

What is the major purpose of Licensing

To protect the health and safety and welfare of the public

What is the purpose of a workers permit

To provide conclusive evidence of a minors educational standing and age

What is the claims resolution process used for

To resolve disputes between the contractor and the owner about additional amounts owed as a result of changes to the contract

What is a single prime contracting method

Traditional form of contracting. The project owner hires an architectural firm to design the project. Contractor then performs the work according to the specifications of the project and is responsible for the costs off all materials and labor to obtain project completion