Florida Business and Finance Exam (Construction Contractors)

A Difference in Bid guarantee obligates the surety to pay only the spread between the low bid and the next qualified bid (capped at the bond amount), while a Forfeiture Obligation bond requires forfeiture of the full stated bond amount.

Factoring is the outright sale of receivables to a finance firm, whereas financing pledges the receivables as security for a loan.

Bookkeeping is the prescribed recording of financial data, while accounting encompasses designing the record system and preparing, reviewing, and interpreting reports based on that data.

Under percentage-of-completion, retainages are accrued as earned income when work progresses; under completed-contract, general expenses assigned to jobs must be deferred using special deferral accounts within each broad expense section.

Direct costs such as performance bond premiums, direct labor, and materials are charged specifically to a contract, while indirect costs such as workers' compensation insurance and small tools relate to jobs generally and must be allocated.

Fixed overhead expenses (e.g., vehicle registration fees) remain constant regardless of activity level, while variable overhead expenses (e.g., state fuel tax, union welfare, small tools) fluctuate with consumption, labor cost, or sales volume.

Depreciation recognizes the using-up of a long-term asset's value over its useful life, while amortization spreads the cost of improvements (e.g., leasehold improvements) over the term of the lease.

An S corporation must have only one class of stock, no more than the allowed number of shareholders, and passive income (dividends, interest, rents, royalties, etc.) cannot exceed 20% of total revenues, whereas a C corporation has no such restrictions but faces potential double taxation.

A limited partner's liability is capped at their investment amount but they cannot participate in management without risking that immunity, while a general partner bears unlimited liability and manages day-to-day operations.

Employers who reported $50,000 or less in employment taxes during the lookback period deposit monthly, while those who reported more than $50,000 deposit semiweekly (Wednesday paydays due following Wednesday; Saturday–Tuesday paydays due following Friday).

A Form 2678 agent is jointly liable with the employer for employment taxes it handles, while a reporting agent authorized via Form 8655 may file and sign returns electronically but the employer remains solely liable.

When plans and specifications conflict on a construction project, courts have held that the specifications are the guiding document and take precedence over the plans.