Idaho Plumbing Specialty Contractor Exam

Accrual recognizes economic events by matching revenues to expenses at the time the transaction occurs and is GAAP compliant, while the cash method recognizes them when payment is made or received and is not GAAP compliant (and is not permitted for a corporation, or a partnership with a C corporation partner, with average gross receipts over $5 million).

Leasing is a long-term agreement with a locked-in rate, less cash up front and potential tax benefits, while renting is short-term (by the hour, half day, or whole day) with the owner deciding when to return it and no fee for early return.

The current ratio divides current assets by current liabilities, while the quick ratio subtracts inventories from current assets first, giving a more conservative liquidity measure because inventories may not convert quickly to cash.

A lump sum contract covers the entire project as one total price, while a unit price contract breaks the project into sections each billed separately with its own cost; both set a final price regardless of the contractor's actual costs.

Named-peril covers only losses from items specifically named in the policy, while all-risk is the most common type and provides broader coverage.

General liability covers claims arising during construction, while completed operations covers third-party injuries or property damage occurring after the contractor has finished the operation.

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 for the amount contributed.

Under the ADA undue hardship means significant difficulty or expense judged against employer size, financial resources and business needs — a higher threshold than Title VII's 'more than a minimal burden.'

The ADA generally applies to employers with 15 or more workers, while the ADEA applies to employers with 20 or more employees.

Percentage of completion recognizes a portion of contract revenue and estimated costs each accounting period (preferred for matching revenue and expenses to the period of benefit), while the completed contract method may only be used for projects finished within two years by contractors whose average annual income is under $10 million over the past three years.

The balance sheet shows liquidity status and ability to meet short-term debt (Assets = Liabilities + Equity), while the cash flow statement summarizes actual or anticipated cash in and out over a period and can be the most valuable report for a contractor because of the importance of cash control.

An independent contractor must be free from the right of direction and control in contract and in fact; employer control of the manner, method, or mode of the work indicates employee status, method of payment is not controlling, and genuine doubt must be resolved in favor of finding an employee.

Specifications (a detailed description of blueprints/plans including material types and quantities) are listed as an optional element of a construction contract, not one of the common parts every construction contract should include.