Business and Finance

Business and Finance Test for State Construction Exams in Florida

Keep in mind the questions on the exam are from the 1970’s. Hopefully soon they’ll be at least up to the 21 century.

This exam is offered by Pearson Vue©, consists of 125 questions, use 6 books, and has a time limit of 6 1/2 hours. All-State Certified Contractors being licensed by the CILB must pass this exam before becoming licensed. Once you pass this exam you’ll never need to retake if pursuing another license under the CILB.

List of books for State Business Exam

To buy these books individually you can follow each of the links below.

  • Florida Contractor’s Manual
  • Florida Statutes 455 (also in Ch. 2 of Contractors Manual)
  • AIA Document A201
  • AIA Document A401
  • AIA Document A701
  • Builder’s Guide to Accounting

Business Exam Prep and ContentArea A (11%): Establishing the Contracting Business

  1. Determining the Business Organizational Structure: business structure laws and regulations, fiduciary responsibilities of officers and directors, open vs. closed corporations, organizational charts and chain of responsibilities, state and local licensure requirements, tax advantages, and/or liabilities for various business structures
  2. Develop the Business Plan: accounting practices, local marketplace, scope of contractor license
  3. Establish Relationships with Other Professionals: accountant specialization, attorney specialization, insurance types and limitations, underwriting requirements for bonding
  4. Acquire Fixed Assets: knowledge advantages/disadvantages of business location
  5. Obtain Insurance: accounting practices, advantages/disadvantages of various types of insurance, coverages, and limitations of insurance.

Content Area B (26%): Managing Administrative Duties

  1. Develop the Business: availability of staffing for business operation, income sources, markets, and market share
  2. Determine Outsourced Services
  3. Determine Business Overhead: FICA, advertising costs (business cards, dues, printing, etc.), communication costs (cell phones, landlines, etc.), cost of sales (travel expenses), federal unemployment (FUTA), general liability rates, lease expenses, loan financing expenses (interest, etc.), Medicare rates, rent costs, state unemployment (SUTA), utility costs, worker’s compensation
  4. Preparing Bids/Proposals: accounting principles, AIA documents, business projections/goals current status, company overhead, contract documents, contract law, cost of financing projects, costs associated with growth, general conditions costs of projects, how to review contracts, how to write offers, insurances associated with labor rates, labor productivity, the statute of frauds, taxes associated with labor rates, components of a valid contract
  5. Purchase Materials/Supplies: depreciative costs, fundamentals of Uniform Commercial Code, inventory system operation (FIFO, etc.), invoice approval systems, negotiating skills, purchasing systems, receiving systems, state sales tax laws, statute of frauds, vendors in area
  6. Prepare Invoices/Draw Requests: basic math skills, calculation of percentage of work completed, contract/subcontract documents, how to prepare invoices/draw requests, lien laws
  7. Develop a Safety Program: drug testing regulations, MSDS sheets, OSHA regulations
  8. Maintain Insurance: general terms and definitions used in policies, insurance policies, limits of insurance, various types of insurance, various types of risk
  9. Managing Contracts: contract law, contract scope, job completion schedules, lien laws, mediation and arbitration processes, local building code requirements, tort law, risk management

Content Area C (10%): Managing Trade Operations

  1. Schedule Trade Operations: critical path method (CPM), delivery times, manufacturing times, requests for information (RFI), sequencing trades, submittals/approval/fabrication process
  2. Maintain OSHA/Safety Records: document/record retainage requirements, knowledge penalties for non-compliance with OSHA
  3. Purchase/Order Materials & Supplies: accounting skills, basic math skills, job schedules, negotiation skills, organizational skills, plan reading skills, quality control, quantity take-offs, terms and abbreviations on invoices, types of building materials
  4. Leasing/Purchasing Equipment: cost of operation of equipment, depreciation, equipment operation, forecasted use of purchased equipment, interest costs for financing, maintenance, salvage resale values, support equipment required for equipment, tax credits associated with purchases, training needs for equipment, transportation costs for equipment
  5. Manage Material/Tool/Equipment Inventory: equipment maintenance procedures, inventory methods

Content Area (32%): Conducting Accounting Functions

  1. Manage Accounts Receivable: accounting principles, basic math skills, computer skills, lien laws
  2. Manage Accounts Payable: accounting principles, basic math skills, computer skills, how to calculate discounts, lien laws
  3. Manage Cash Flow: accounting, banking, basic math skills, financial ratios
  4. File Tax Forms & Returns: accounting principles, basic math, federal tax laws, property tax laws, record keeping requirements, sales tax laws, state tax laws
  5. Track Job Costs: accounting principles, basic math
  6. Calculate Employee Payroll: accounting, state & federal tax laws, basic math, employment laws, employment/labor laws, hierarchy of garnishments

Content Area E (6%): Managing Human Resources

  1. Hire New Employees: employment laws, discrimination laws, interviewing skills, required forms for new hires, background checks
  2. Develop Human Resource Policies & Procedures: employment/labor laws, OSHA, chain of custody (drug tests), insurance regulations
  3. Evaluate Employees: employment/labor laws

Content Area F (15%): Complying with Government Regulations

  1. Comply with Federal Laws & Regulations: FEMA (immigration components), OSHA, tax laws, National Pollution Discharge Elimination System (NPDES), Environmental laws
  2. Comply with State Laws& Regulations: Chapter 455 F.S. (Business & Professional Regulation), Chapter 713 F.S. (Liens), 61G4 F.A.C., Worker’s Compensation, Laws/DOR Sales/Use Tax, Chapter 489, Part 1 F.S (Construction Contracting), required continuing education, CEU credit records, license holder responsibilities.