Author: Anonymous

The project is completed, and the contractor bills the client for $10,000 of previously withheld retention. The contractor’s total assets do not change.

Highway contractors generally have higher current liabilities-to-net worth and debt-to-equity ratios than residential contractors.

A company makes a $2,433.17 capital lease payment, including $800 of interest. Profit and equity decrease by $2,433.17.

Drawing $100,000 from a previously signed construction loan increases cash flow by $100,000 but does not change total assets.

When preparing a bid, a contractor may increase its overhead and profit markup if its gross profit margin has been too low.

A contractor purchases a truck for $20,000. The truck has a 5-year useful life and an estimated $5,000 salvage value. Using the straight-line method, what is the truck’s book value at the end of Year 3?

Which of the following is NOT a reason why financial management in construction differs from financial management in other industries?

A very short Average Age of Accounts Payable may indicate that a company is underusing trade financing.

When selecting a computerized accounting system, a construction company should determine which features and modules fit its actual needs rather than assuming that a system with more features is necessarily better.

Recording $1,800 of depreciation on the general office decreases total assets, profit, and equity by $1,800.