Exam Cheat Sheet · Quick Reference

Idaho HVAC Contractor Exam

Idaho  ·  PSI Services Contractor

Verified, not estimated. Every figure below is drawn from the official exam structure we maintain — question counts, passing standard and topic weighting. Practice questions are grounded in the source law with statute citations. We omit any figure we can't verify rather than guess at it.
Total questions
100
Passing score
70%
Exam time
240 min
Administered by
PSI Services Contractor
Format
Reference materials allowed

Idaho State Portion 100 questions

Contractor's Business and Law Reference Manual Section 1 1 Q · 1%
Common reasons for contractor business failureAccounting and financial management issues leading to failureManagement and leadership issues in contracting businessesPersonnel issues affecting contractor business stabilityPerformance issues and poor project selectionExternal factors beyond owner control affecting construction businessesPurpose and scope of the Contractor's Business and Law Reference Manual
Contractor's Business and Law Reference Manual Section 2 2 Q · 2%
Business organization structures (sole proprietorship, partnership, LLC, corporation)Steps and checklist for starting a contracting businessBusiness plan components and structureEmployer responsibilities (employment taxes, workers' compensation, immigration verification)Permits, licenses, and regulations (federal, state, county, local)Tax obligations (income, sales and use, excise, property)Registration requirements with the Secretary of StateProtecting business products and ideas (patents, copyrights, trademarks)
Contractor's Business and Law Reference Manual Section 3 2 Q · 2%
Types of business organization structures available in IdahoSole proprietorship and general partnership characteristics and liabilityLimited liability partnership (LLP) formation and liability protectionsLimited partnership (LP) roles of general vs. limited partnersLimited liability company (LLC) formation, naming requirements, and registrationCorporation types (S Corp, C Corp, Professional Service Corporation) and tax treatmentFiling requirements with Idaho Secretary of State for new and foreign business entitiesSecurities regulations and Idaho Department of Finance notification requirements
Contractor's Business and Law Reference Manual Section 4 2 Q · 2%
DOPL mission and regulatory authorityRegulatory boards administered by DOPLWho is required to obtain a license in IdahoConsequences of working without a required licenseLicense qualification requirements and application processNon-refundable fees and supporting documentation requirementsDOPL contact information and application resources
Contractor's Business and Law Reference Manual Section 5 20 Q · 20%
Bookkeeping process and financial statements (balance sheet, income statement, cash flow statement)Cash vs. accrual accounting methods and GAAP complianceFinancial ratios (liquidity, efficiency, leverage, and profitability ratios)Depreciation methods (straight-line, MACRS, and IRS Section 179 deduction)Cash flow management and positive vs. negative cash flowProject accounting methods (completed contract vs. percentage of completion)Equipment acquisition options (leasing, renting, and purchasing)Small business financial recordkeeping schedule (daily, weekly, monthly, quarterly, annually)
Contractor's Business and Law Reference Manual Section 6 20 Q · 20%
Federal anti-discrimination laws: ADEA, ADA, Title VII, EPA, GINA, and Pregnancy Discrimination ActEmployee leave rights under FMLA: eligibility, qualifying reasons, and employer coverage thresholdsFair Labor Standards Act: minimum wage, overtime pay requirements, and common exemptionsIdaho-specific employment laws: minimum wage, wage payment rules, new hire reporting, and recordkeeping requirementsFederal contractor labor standards: Davis-Bacon Act, Service Contract Act, Walsh-Healey Act, and Copeland Anti-Kickback ActReasonable accommodation and undue hardship under ADA and Title VII religious discrimination provisionsRequired workplace poster obligations and penalties for non-complianceEmployee Polygraph Protection Act, USERRA military reemployment rights, and ERISA pension plan standards
Contractor's Business and Law Reference Manual Section 7 20 Q · 20%
Types of contractor insurance and their coverage purposesWorkers' compensation insurance requirements and employer obligations in IdahoUnemployment insurance eligibility, employer liability, and experience ratingSurety bonds: bid bonds, performance bonds, and payment bondsIndependent contractor classification criteria for UI tax exemptionReportable and non-reportable wages for unemployment insurance purposesPenalties for failure to carry workers' compensation or pay UI taxesThe Miller Act and federal public works bonding requirements
Contractor's Business and Law Reference Manual Section 8 7 Q · 7%
Types of bids: open (hard) bid vs. closed bid characteristics and proceduresPublic works bidding requirements and Idaho contractor licensing for public projectsFactors to evaluate when deciding whether to bid a jobTypes of estimates: conceptual, preliminary, and detailed estimatesSix parts of a detailed estimate including quantity survey/takeoff and pricing componentsLabor, materials, and equipment pricing within a detailed estimateGeneral overhead vs. project overhead costs and contingency/allowance calculationsMark-up, profit calculation, and area modification factors in the summary total
Contractor's Business and Law Reference Manual Section 9 8 Q · 8%
Essential elements of a legally valid contractIdaho statutory retention limits on construction contractsStatute of Frauds requirements for written agreementsTypes of construction contracts (lump sum, cost plus, time and materials, etc.)Common required components of construction contractsBreach of contract definition and remediesRetention release timelines and dispute withholding rulesOptional contract elements such as termination clauses and timing incentives
Contractor's Business and Law Reference Manual Section 10 10 Q · 10%
Five phases of project management (initiation, planning, executing, monitoring/controlling, closing)Critical Path Method (CPM) components and calculationsGantt chart interpretation and scheduling toolsProject scheduling concepts (float/slack time, earliest and latest start dates, contingency time)Project staffing roles and responsibilities (owner's representative, CM/PM, superintendent, foreman, expediter)Cost control procedures (variance detection, cost codes, inventory control, purchase orders)Quality control during construction (conformance to design, specifications, re-design exceptions)Project closeout and contract closure
Contractor's Business and Law Reference Manual Section 11 5 Q · 5%
OSHA recordkeeping requirements and OSHA Forms 300, 300A, and 301Mandatory reporting of workplace fatalities and multiple hospitalizations within eight hoursOSHA workplace poster requirements and penalties for non-complianceEmployer size exemptions for recordkeeping (10 or fewer employees and low-hazard industries)Recordable vs. non-recordable work-related injuries and illnessesOSHA cooperative programs (VPP, SHARP, OSHA Challenge, Alliance Program, Strategic Partnership Program)OSHA consultation services for small businesses (no-cost, no-penalty on-site assistance)Financial impact of workplace safety programs and return on investment
Contractor's Business and Law Reference Manual Section 12 1 Q · 1%
Idaho sales and use tax obligations for contractorsIndependent contractor vs. employee classification using the right-to-control testIncome tax filing requirements by business entity type (sole proprietor, partnership, corporation, LLC)Employment tax requirements and withholding forms for businesses with employeesContractor sales tax exemptions and exempt purchase proceduresContractor vs. retailer vs. contractor/retailer tax treatment distinctionsTax recordkeeping requirements and record retention periodsProperty taxes and taxpayer identification number requirements
Contractor's Business and Law Reference Manual Section 13 2 Q · 2%
Who qualifies for mechanic's and materialmen's lien rights under Idaho Title 45Filing requirements and deadlines for lien claims (90-day rule, county recorder, required contents)Priority and ranking of lien classes when proceeds are insufficientDuration and enforcement of liens (6-month filing period, 5-year judgment lien limit)Release of mechanic's lien by posting surety bond (petition process, bond form, hearing)General contractor disclosure requirements for residential property contracts over $2,000Claims against multiple buildings (designation of amounts per structure)Lien waivers and joint checks as contractor protective practices

Key Distinctions

Accrual Accounting MethodvsCash Accounting Method

Accrual recognizes revenues and expenses when the transaction occurs (GAAP compliant), while cash recognizes them only when payment is made or received (not GAAP compliant and not permitted for corporations with average gross receipts exceeding $5 million).

Contractor's Business and Law Reference Manual, Section 5: Accounting & Finance
Renting EquipmentvsLeasing Equipment

Renting is a short-term arrangement (by the hour, half day, or full day) with no early-return fee and maintenance handled by the rental company, while leasing is a longer-term contractual commitment.

Contractor's Business and Law Reference Manual, Section 5: Accounting & Finance — Leasing, Purchasing, or Renting Equipment
Current RatiovsQuick Ratio (Acid-Test Ratio)

The current ratio divides all current assets by current liabilities, while the quick ratio excludes inventories from current assets, making it a more conservative measure of liquidity.

Contractor's Business and Law Reference Manual, Section 5: Accounting & Finance — Liquidity Ratios
Lump Sum ContractvsUnit Price Contract

A lump sum contract covers the entire project for one total fixed price, while a unit price contract breaks the project into separately billed sections each with its own cost.

Section 9: Contracts — Lump Sum and Unit Price (Fixed Price) (Page 86)
Named-Peril Builder's Risk InsurancevsAll-Risk Builder's Risk Insurance

Named-peril builder's risk covers losses only from specifically listed perils in the policy, while all-risk builder's risk is the more common type and provides broader coverage.

Section 7: Insurance – Builders Risk bullet, Page 65
Percentage of Completion MethodvsCompleted Contract Method

The percentage of completion method recognizes a portion of revenue and expenses each accounting period based on progress, better matching revenues to expenses, while the completed contract method defers recognition until project completion.

Contractor's Business and Law Reference Manual, Section 5: Accounting & Finance — Percentage of Completion Method
General PartnervsLimited Partner

A general partner controls the business and is personally liable for partnership debts, while a limited partner contributes capital and shares profits but cannot manage the business and is liable only up to the amount contributed.

Division of Occupational & Professional Licenses Contractor's Business and Law Reference Manual (Idaho), Pages 16-17
Private Sector BiddingvsPublic Works Bidding

Private sector owners are not required to advertise for bids and can choose when and who bids, while public works projects are required by law to be advertised for bids.

Section 8: Estimating & Bidding, Bidding section, Page 79
Balance SheetvsIncome Statement

The balance sheet shows the overall liquidity and financial position of a business (assets, liabilities, equity) at a point in time, while the income statement reports only profit or loss activity during a specific reporting period.

Contractor's Business and Law Reference Manual, Section 5: Accounting & Finance — Balance Sheet
Independent ContractorvsCovered Employee (Idaho UI)

An independent contractor is free from the employer's direction and control over the manner, method, and mode of work, while a covered employee is subject to that direction and control, making the employer liable for Idaho unemployment insurance tax.

Contractor's Business and Law Reference Manual, Section 7: Insurance — Independent Contractor
Design/Planning PhasevsConstruction Phase

The most important quality-control decisions — component configurations, material specifications, and functional performance — are made during the design and planning stages, not during construction.

Section 10: Project Management in Construction — Quality Control and Safety during Construction (Page 97)
Experience Rate EmployervsCost Reimbursement Employer (Idaho UI)

Standard covered employers are assigned an experience rate for Idaho unemployment insurance financing, while governmental units and Section 501(c)(3) nonprofits may elect to directly reimburse the Idaho Employment Security Fund for benefit payment costs instead.

Contractor's Business and Law Reference Manual, Section 7: Insurance — Cost Reimbursement Employers

Key Terms

Independent Contractor Status (Idaho UI) Contractor's Business and Law Reference Manual, Section 7: Insurance — Independent Contractor
Under Idaho unemployment insurance law, a worker is an independent contractor only if free from the employer's direction and control over the manner, method, and mode of work both in contract and in fact; the method of payment alone does not determine status.
Employer Record-Keeping Requirement (Idaho UI) Contractor's Business and Law Reference Manual, Section 7: Insurance — Independent Contractor, recordkeeping
Idaho unemployment insurance rules require employers to maintain separate records distinguishing exempt independent contractor wages from covered employment wages; failure to do so results in the employer owing tax on all wages including exempt ones.
Cost Reimbursement Election (Idaho Employment Security Fund) Contractor's Business and Law Reference Manual, Section 7: Insurance — Cost Reimbursement Employers
Governmental units and nonprofits defined under IRC Section 501(c)(3) may elect to reimburse the Idaho Employment Security Fund directly for benefit payment costs as an alternative to being assigned an experience rate.
Certificate of Assumed Business Name (Idaho) Division of Occupational & Professional Licenses Contractor's Business and Law Reference Manual (Idaho), Page 16
A general partnership that does not operate under the full legal names of each owner must file a Certificate of Assumed Business Name with the Idaho Secretary of State.
Foreign LLC Registration (Idaho) Division of Occupational & Professional Licenses Contractor's Business and Law Reference Manual (Idaho), Page 17
An LLC organized in another state must submit an original signed Application for Registration as a Foreign Limited Liability Company plus a duplicate copy to the Idaho Secretary of State before operating in Idaho.
Professional Service Corporation Name Requirements (Idaho) Division of Occupational & Professional Licenses Contractor's Business and Law Reference Manual (Idaho), Page 19
An Idaho Professional Service Corporation's name must end with 'Chartered,' 'Professional Association,' 'Professional Corporation,' or the abbreviations 'PA,' 'PC,' or 'Chtd.'
Idaho Licensed Trades Requiring Licensure Division of Occupational & Professional Licenses Contractor's Business and Law Reference Manual, Page 20
Idaho statutes require any individual or company performing Electrical, HVAC, Manufactured Housing, Plumbing, and Public Works work to obtain required state licenses before operating.
Posting Contractor's Business and Law Reference Manual, Section 5: Accounting & Finance — Bookkeeping process
Posting is the bookkeeping process of transferring totaled journal entries to the general ledger at the end of an accounting period.
Balance Sheet Equation Contractor's Business and Law Reference Manual, Section 5: Accounting & Finance
The fundamental balance sheet equation states that Assets = Liabilities + Equity, and the two sides must always balance.
Percentage of Completion Formula Contractor's Business and Law Reference Manual, Section 5: Accounting & Finance — Percentage of Completion Method
Cumulative revenue is calculated as (cost incurred to date ÷ total estimated cost) × contract price, recording proportional revenue each accounting period.
Change Order Division of Occupational & Professional Licenses Contractor's Business and Law Reference Manual (Idaho), Page 85-86
A change order is a written document completed when changes in the work occur that differ from the original contract scope, protecting both parties legally.
Engagement Letter Division of Occupational & Professional Licenses Contractor's Business and Law Reference Manual (Idaho), Page 13
An engagement letter is a document signed by an accountant and client before work begins that spells out fees, scope of work, and other details to avoid misunderstandings.
Section 179 Deduction (2014) Contractor's Business and Law Reference Manual, Section 5: Accounting & Finance — IRS Section 179 Deduction
Under IRS Section 179 as referenced in the manual, the deduction limit for qualifying equipment purchases is $500,000, with a $2 million cap on total equipment purchases.
1099 Form Threshold Contractor's Business and Law Reference Manual, Section 5: Accounting & Finance — Annually checklist
A business must complete and mail a 1099 form to each independent contractor who earned more than $600 from the company in the previous year.

Formulas to Know

Current RatioCurrent Assets ÷ Current Liabilities
Quick Ratio (Acid-Test Ratio)(Current Assets − Inventories) ÷ Current Liabilities
Balance Sheet EquationAssets = Liabilities + Equity
Cash FlowCash Receipts − Cash Payments (over a given period)
Percentage of Completion — Cumulative Revenue(Cost Incurred to Date ÷ Total Estimated Cost) × Contract Price
Interest Coverage RatioEBIT ÷ Interest Expense
Working Capital RatioCurrent Assets ÷ Current Liabilities [healthy range: 1.2–2.0]
Accounts Receivable TurnoverNet Credit Sales ÷ Average Accounts Receivable
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