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Law and Order CHAP 4
Business Management & Bookkeeping
| Question | Answer |
|---|---|
| 4A: In a Sole Proprietorship or a Partnership, Creditors may go after _____ assets | personal |
| 4A: In a Corporation or LLC, Creditors may only go after _____ assets | corporate |
| 4A: A Corporation that can file business income as individual income is known as a | “S” chapter corporation |
| 4A: What size Surety bond must a LLC post in order to acquire a liscense | $100,000 |
| 4A: What size General Liability Insurance must a LLC carry | $1 Million Dollars for 5 or less members, plus $100,000 for each additional member |
| 4A: If an LLC is suspended, and continues operation, each member will be held personally liable for | $1 Million Dollars |
| 4B: Sole Ownership or Partnerships are required to pay taxes _____ | pre-paid or quarterly |
| 4B: What is an EIN | Employers Identification Number |
| 4B: What is the EDD | Employment Development Department |
| 4B: What does California require for businesses that sell tangible personal property | sales permit |
| 4B: Where should a contractor deposit collected SALES tax | The State Board of Equalization |
| 4C: Under the _____ basis of accounting, revenue is recognized when cash is actually received | cash |
| 4C: Under the ______ basis of accounting, revenue is recognized when earned and expenses incurred | accrual |
| 4D: The ___________ is a statement of financial condition of an individual business at a certain point in time | balance sheet |
| 4D: The Right Side of the Balance Sheet contains | Liabilities and Stockholders Equity |
| 4D: The Left Side of the Balance Sheet contains | assets |
| 4D: Assets are organized in order of ______ | Liquidity |
| 4D: Current Assets are Assets that can be ______ | Cash or turned into cash within the normal course of business |
| 4D: Define “Retention” | A specified amount withheld from progress payments to the contractor pending satisfactory completion |
| 4D: Define “Accounts Receivable” | The amounts due from customers, other than retentions |
| 4D: Define “Inventory” | All materials, labor, and overhead on a job that you have spent but not yet charged for |
| 4D: Insurance Premiums are an example of which asset | Prepaid Expenses |
| 4D: Property, Plant and Equipment are also known as | Fixed assets |
| 4D: Regardless of their market value, Fixed assets are to be valued at _____ | original cost minus depreciation |
| 4D: Define “contra account” | an account linked with another account, for example Depreciation is linked to Fixed Assets |
| 4D: Define “Depreciation” | the process of allocating the costs of assets over their expected useful lives |
| 4E: Define “Current Liabilities” | debts of the company that are due within one year of the balance sheet date |
| 4E: Define “Accounts payable” | Money owed to suppliers and subcontractors |
| 4E: Define “Notes payable” | Principal owed on a written note this year (loan) |
| 4E: Define “Accrued payroll” | Salaries and Wages owed to the employees |
| 4E: Define “Miscellaneous Taxes Payable” | Taxes owed to local and state governmental agencies |
| 4E: Stockholders Equity represents _____ | the claim of the owners on the assets of the business |
| 4E: Define “Capital Stock” | The total amount invested by the contractor in exchange for shares of common stock |
| 4E: Define “Retained Earnings” | Total corporation earnings minus the total dividends declared |
| 4F: Current Ratio = | Current Assets / Current Liabilities |
| 4F: Quick Ratio = | (Current Assets – Inventory) / Current Liabilities |
| 4F: Working Capital = | Current Assets – Current Liabilities |
| 4F: Debt Ratio = | Total Liabilities / Total Assets |
| 4F: Debt to Equity Ratio = | Total Liabilities / Total Equity |
| 4F Equity Ratio = | Total Equity / Total Assets |
| 4F: Assets to Equity Ratio = | Total Assets / Total Equity |
| 4F: The Statement that summarizes the operations of the company over a PERIOD of time is known as the | Income Statement |
| 4F: Define “Income” on an Income Statement | all the billings made to customers for completed projects, as well as works in progress |
| 4F: Define “Cost of Operations” on an Income Statement | all costs and expenses associated with running the business |
| 4F: Which Overhead cost is not shown on the “Cost of Operation” line | federal income taxes |
| 4F: Define “Direct Labor” on an Income Statement | The actual cost of labor payroll (wages) |
| 4F: Define “Direct Labor Burden” on an Income Statement | The cost OF employing (workmans comp, taxes, benefits etc.) |
| 4F: The largest Cost of Operation on an Income Statement is USUALLY ______ | Materials Used |
| 4F: Pretax Income, or “Income before provision” is found by subtracting | total operating cost from total sales (income) |
| 4F: Pretax Income is the number used for corporations to pay _______ | Federal Income Tax |
| 4F: The net income represents the sum of ALL revenues minus ALL expenses, also known as the _____ | Bottom Line |
| 4G: List three types of planning systems used by contractors | Calendar, Bar Chart, Critical Path |
Created by:
yobryan2009
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