MHIC Exam 2024: Accounting Cycle, Ratios, Licensing, and Regulations Questions and Answers, Exams of Social Contract Theory

Download MHIC Exam 2024: Accounting Cycle, Ratios, Licensing, and Regulations Questions and Answers and more Exams Social Contract Theory in PDF only on Docsity! MHIC Exam 2024 Questions And Answers Business Types not Required to have EIN # - correct answer -sole proprietorships with no employees -LLCs with single owner S corporation - correct answer a business entity that meets certain requirements to be able to inherit the protective benefits of being a corporation, but be taxed as a partnership. - must be domestically incorporated - must have only a single type of stock and less than 100 shareholders. - shareholder distributions are taxed on the individual shareholder tax returns - it can pass these incomes to shareholder without having to pay any fed corporate tax, deemed a "pass through." Owner pays taxes at their respective tax rate and not the corporate tax rate Self Employment Tax - correct answer Tax for individuals that work for themselves to pay their portion of Social Security and Medicare benefits. MHIC Exam 2024 Questions And Answers Requirements to be Classified as IRS Deductible Expense - correct answer to be deductible, it must be an "ordinary" and "necessary" expense. Thus it is an expense that is common in your industry, but is also helpful/appropriate for your trade or business. Employment Taxes that are not Withheld from Paychecks - correct answer -FUTA -State Unemployment tax FICA - correct answer - Stands for Federal Insurance Contributions Act - Employers withhold FICA (social security and Medicare) from employee paychecks and also pay a matching employer portion. -Form 941 reconciles this Franchise tax - correct answer A tax levied on the right to do business in a state as a corporation. Although income considerations may come into play, the tax usually is based on the capitalization of the corporation. MHIC Exam 2024 Questions And Answers Types of Operating Expenses - correct answer Also called "indirect costs" Selling expenses are costs incurred to market the business Fixed overhead are necessary to the function of the business and no specific project. Purpose of Cash Flow Statement - correct answer provide information about a company's gross receipts and gross payments for a specified period of time it lists changes in cash based on operating, investing, and financing activities. Return on Total Assets Ratio - correct answer used to determine if company assets are being employed in the best manner Net profit (after taxes) / total assets = return on assets Liquidity Ratio - correct answer Current Assets/ Current Liabilities MHIC Exam 2024 Questions And Answers A ratio over 1 indicates the company is in a positive liquidity position and can cover it's debts. Debt Ratio - correct answer measures the percent of total funds provided by creditors. You'll want to keep this relatively low. Total debt / total assets = debt ratio Methods of Accounting - correct answer Cash vs. Accrual Method. Main difference is when income and expenses are reported. Cash method reports both when you receive/pay it. Its much more convenient but downside is you don't match revenues with expenses incurred related to that revenue. Accrual method income is recognized when services occur, not when you collect the money. What defines a Home Improvement - correct answer any addition, alteration, improvement, MHIC Exam 2024 Questions And Answers etc. work done to a residence or structure adjacent to a residence. This also includes work done to the yard or surrounding land around a residence. It is work that adds value and would typically remain as part of the home if it were sold Exemptions to Home Improvement Law/Licensing - correct answer - Maintenance activities like cutting grass, weeding, snow plowing, raking leaves, cleaning, etc. - Salespeople that do not perform, either directly or indirectly, the installation of materials. - Employees to contractors - Work done on federally or government owned land Contractor - correct answer person who performs OR offers to perform a home improvement for an owner. An employee is not contractor Does a Handyman need an MHIC license? - correct answer yes, no matter how small the contract, they are still providing an improvement or change to the home. MHIC Exam 2024 Questions And Answers Deposit/Payment Rules - correct answer - contractor may not accept more than 1/3 deposit up front - no payment is accepted until contract is signed - agreed upon price clearly stated in contract - further payment terms are negotiated between contractor and homeowner Coverages under Door to Door Sales Act - correct answer - gives consumers right to cancel the contract without penalty or obligations within 5 business days after the sale. - If cancelled, the contractor must return the homeowner's deposit with 10 business days of the cancellation notice. - requires the seller to provide the buyer a copy of the contract Situations where the Door to Door Sales Act does not cover a project - correct answer - when the buyer initiates contact and the goods/services are needed to meet a bona fide personal emergency of the buyer, and the buyer signs a separate cancellation waiver form MHIC Exam 2024 Questions And Answers - a project made based on prior negotiations at a retail business consumer goods or services are offered for sale on a continued basis; Commission Advertisement Standards - correct answer - each ad must contain MHIC number no exceptions - ad cannot be false or misleading - clearly stating any additional charges that would apply - MHIC number clearly stated both sides of all company vehicles Implication of Mold Remediation Services Act - correct answer companies providing mold remediation services must obtain separate license. each employee performing the work must be certified as a remediation technician/supervisor/etc. What does a Lien do - correct answer - it can stop the homeowner from selling the home with a clear title following incomplete payment to a Home Improvement contractor - proceeds from the sale would then be court ordered to go towards paying the contractor - lien may be established up to 15% of the building' MHIC Exam 2024 Questions And Answers s value regardless of the amount contracted on labor and material Who has lien rights under the Maryland Mechanic's lien law? - correct answer - the general contractor and any subcontractors What must be supplied after payment is made following a lien notice - correct answer The contractor must supply the owner with a signed lien release from each subcontractor and material supplier. How much time does a contractor have to file a lien notice - correct answer 120 days following furnishing of labor and/or materials Workers Comp Insurance is Required for Employers With - correct answer One or more full or part time employees If you are doing business under a name other than your personal name.... - correct answer A trade name needs to be filed with the Department of Assessments and Taxation MHIC Exam 2024 Questions And Answers A contractor may not accept a ___________________ before signing a home improvement contract - correct answer payment for deposit How long after a license gets revoked will the contractor need to retake the licensing exam? - correct answer 6 months Under the Maryland Occupational Safety and Health Act, employers must comply with safety and health standards adopted by the.... - correct answer Maryland Department of Labor, Licensing, and Regulation, Department of labor and industry Potential costs to employers of substance abuse - correct answer It costs employers over $100 billion annually. Examples include: -workers compensation claims - medical costs - absenteeism - lost productivity - employee turnover MHIC Exam 2024 Questions And Answers Osha regulations require an - correct answer emergency action plan over 10 employees the plan must be written and given out. Under 10 employees, the plan may be delivered verbally An emergency action plan must include procedures for.... - correct answer -reporting a fire or other emergency - emergency evacuation - employees who remain for critical operations before evacuation - accounting for all employees after evacuation - employees performing rescue or medical duties Osha Recordkeeping Form 300 - correct answer an injury/illness log for each recordable injury or illness incident. Includes serious events except for those requiring only first aid treatment or minor illnesses, days away from work, and death. Osha Recordkeeping Form 300A - correct answer a form listing all the incidents from 300 forms that must be conspicuously posted at the MHIC Exam 2024 Questions And Answers workplace. It must be posted by Feb. 1 and kept in place until at least April 30 the following year covered by the form Osha Recordkeeping Form 301 - correct answer individual incident report that provides added detail about each specific recordable injury or illness. Who is exempt from Osha recordkeeping forms - correct answer - contractors with less than 10 employees - businesses in low risk industries like financial services, retail , etc. What are material safety data sheets (MSDS) - correct answer defines a particular hazardous material that a business may be in contact with to educate employees on how to handle them, procedures for exposure, emergency contact information after exposure, etc. The Osh Act grants employees the rights to - correct answer - file a complaint or violation about health/safety conditions without fear of employer retaliation - participate in osha workplace inspections MHIC Exam 2024 Questions And Answers It can be used as a "pre-qualification" for bidding on some projects and is required for public projects Bank Letter of Credit - correct answer Does not act as a bond but can be converted to payment by a bank institution if the contractor does not execute on performance. It typically only covers 5-10% of the bid price Miller Act of 1935 - correct answer requires contractors who do over $100,000 (of work on public buildings to protect the government with performance bonds (100% of contract price) and to protect those who directly supply labor and materials with payment bonds Top Reason's Businesses Fail - correct answer -poor sales -competitive weakness -high operating expenses -inventory problems -too many fixed assets - poor location MHIC Exam 2024 Questions And Answers A Business Plan is a " " kind of document - correct answer Living. This means it is subject to change and adaptation as you gain experiences and the business/overall market changes