CBC Financial Management & Estimating Flashcards
6 cards from real CBC practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 CBC Financial Management & Estimating flashcards as text
Retainage in a construction contract is best described as:
Answer: A percentage of each payment withheld until project completion
Retainage is typically 5–10% of each progress payment withheld by the owner as security against incomplete or defective work.
Which financial statement shows a contractor's assets, liabilities, and net worth at a specific point in time?
Answer: Balance sheet
The balance sheet provides a snapshot of the company's financial position by listing what it owns (assets), owes (liabilities), and the owner's equity.
A contractor submits a 'Pay Application.' What document typically accompanies it to support the amounts billed?
Answer: A lien waiver and updated Schedule of Values
Pay applications are supported by an updated Schedule of Values showing percent complete per line item and often conditional lien waivers for amounts being billed.
What is 'over-billing' (overbilling) in construction accounting?
Answer: Billing for more work than has actually been completed
Overbilling occurs when a contractor invoices for a higher percentage of completion than has actually been achieved, creating a liability on the balance sheet.
Which cost is considered a 'direct cost' on a construction project?
Answer: Concrete materials installed on the job
Direct costs are expenses directly attributable to a specific project, such as labor, materials, and equipment used on that job.
What does a contractor's 'profit margin' represent?
Answer: Net profit as a percentage of total revenue
Profit margin is calculated by dividing net profit by total revenue and expressing the result as a percentage, indicating overall profitability.