Practice Test Geeks(CCP) Certified Cosmetology Professional Practice Test
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Booth Rental & Salon Finance Flashcards

7 cards from real CCP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Booth Rental & Salon Finance flashcards as text

  1. A salon owner wants to set rules about which products a booth renter must use and sell. How does this affect the renter's independent contractor status?

    Answer: It may reclassify the renter as an employee under IRS guidelines

    Controlling which products a renter uses is a hallmark of an employer-employee relationship, which can void independent contractor status.

  2. What does 'accounts receivable' represent in a booth renter's financial records?

    Answer: Money owed to the renter by clients for services rendered

    Accounts receivable is money clients owe the business for services already performed but not yet paid.

  3. Which of the following best describes 'overhead costs' for a booth renter?

    Answer: Fixed and indirect business expenses that exist regardless of client volume

    Overhead includes ongoing costs like booth rent, insurance, and license fees that continue whether or not clients are served.

  4. A booth renter uses a personal vehicle to drive to beauty shows and supplier warehouses. How should these miles be recorded?

    Answer: As business mileage on IRS Form 2106 using the standard mileage rate

    Business-related vehicle miles driven for supply purchasing or professional events qualify for the IRS standard mileage deduction.

  5. What is 'break-even point' in the context of booth rental cosmetology?

    Answer: The revenue level at which total income equals total expenses with zero profit or loss

    Break-even is where income exactly covers all costs, resulting in neither profit nor loss.

  6. A booth renter purchases $2,000 in styling equipment expected to last five years. Which accounting concept applies to spreading this cost over time?

    Answer: Straight-line depreciation

    Straight-line depreciation allocates the equipment cost evenly over its useful life — $400 per year in this case.

  7. A salon's booth rental lease includes a 'right of first refusal' clause. What does this mean for the renter?

    Answer: The renter has the option to match any competing offer before the owner rents the booth to someone else

    A right of first refusal gives the current renter the opportunity to match an outside offer and keep their booth before it goes to another party.