Certified Construction Industry Financial Professional (CCIFP) Practice Exam

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• When accounting for losses, how should they be recorded?
• What is the role of the AIA contract documents in construction accounting?
• Which statement best describes the indirect method of cash flow reporting?
• In the five-step strategic planning process, which step comes second?
• What is the new authoritative GAAP literature & when implemented?
• Which statement about row houses and townhouses under IRS 460 is accurate?
• Which internal control supports reducing fraud risk in cash handling?
• In contract risk management, which instrument generally resolves the risk addressed by exculpatory and indemnification provisions?
• What is the IRS treatment of per diem for meals?
• Which step is about implementing the strategic plan?
• What is force majeure?
• Which statement best describes strategic planning in construction management?
• How is depreciation typically handled for construction equipment?
• Notes to the financial statements typically disclose which of the following?
• What are the differences between AIA payment applications (G701, G702) and traditional invoicing?
• What is the codification number of SOP 81-1?
• What best describes Strategic Planning?
• Which statement best describes the risk associated with the cost-to-cost measurement method?
• In the cost-to-cost method of percentage of completion, which item should be excluded from the calculation?
• Which of the following is NOT listed as an external user of financial statements?
• OCIP stands for?
• What is a surety bond and what roles do principal, obligee, and surety play?
• How should equipment rental versus purchase be treated in project budgets?
• Which item is a component of the Strategic Planning Process?
• What is the primary purpose of job costing in construction project accounting?
• What are financial guarantee bonds used for?
• Which statement is true about Cost-type contracts?
• RAID stands for what?
• Which statement shows cash inflows and outflows, indicating liquidity?
• What are combined and segmented contracts?
• Which measurement method for percentage of completion uses labor hours incurred?
• Which statement correctly distinguishes capital expenditures from operating expenses in construction accounting?
• Which step involves developing an understanding of the existing business?
• Which contract type can include a GMP?
• Which of the following describes an acceptable practice when applying the overhead rate to a job?
• Which statement about Time & Material contracts is correct?
• Which two steps define Activity Based Costing?
• Which contract type is most appropriate when scope is well defined and price certainty is essential?
• What does POC stand for in contractor accounting?
• Which of the following is a non-labor direct cost?
• What is MACRS and how does it affect construction taxes?
• Which method recognizes adjusted gross profit from prior periods ratably in current and future periods?
• Under IRS 460, what defines contract completion?
• In percentage-of-completion accounting, which pair correctly identifies the current asset and current liability accounts?
• What is the difference between billings on a contract and costs incurred to date?
• In accounting literature, SOP stands for which document?
• Distinguish between percentage-of-completion and completed-contract methods in construction accounting.
• When forecasting project costs, which elements related to taxes should be included?
• Fraud risk indicators in construction accounting include which of the following?
• What does general liability insurance cover? What is CGL?
• Strategic planning requires knowledge of which elements?
• Which technique is used to maximize cash flow?
• In the Eichleay formula, which step calculates the overhead per day?
• What are key internal controls for cash receipts and disbursements in a construction company?
• Which guidance item is included in Notice 89-15?
• Which statement about AIA payment applications (G701, G702) is accurate?
• In surety underwriting, which item is NOT considered one of the traditional three Cs?
• In capital budgeting, which method measures the time required to recover the initial investment using cash inflows?
• Change orders typically adjust which aspects of a project?
• Which item represents the disclosed estimated liability on the balance sheet for anticipated contract losses?
• How is the cash conversion cycle (CCC) calculated and monitored for a contractor?
• Which group is explicitly listed as an external user?
• Retainage affects which primary accounting balance by delaying cash receipts and is typically shown as what on the balance sheet?
• Which of the following is an external user of financial statements?
• Under the look back rule, the look back requirement does not apply if the contract is completed within how many years?
• What are the 2 methods of accounting for losses and/or changes in estimates?
• Which element is most directly used by lenders to assess future workload and risk, beyond immediate cash on hand?
• Which is not listed as a major method for determining percentage of completion?
• Which statement correctly describes a characteristic of cost reporting using the percentage of completion method?
• Under Notice 89-15, which guidance area covers small home and residential construction contracts?
• What are pay-when-paid and pay-if-paid clauses and their risks?
• How does ASC 606 affect revenue recognition for long-term construction contracts?
• What is the impact of a parent/subsidiary relationship on financial reporting in construction?
• Under the Completed Contract Method, when are revenue and costs recognized?
• Under IRS rules, a residential construction contract is defined as involving more than how many dwellings?
• What are the two types of wrap-up plans?
• When budgeting, how should equipment rentals be treated and what depreciation applies?
• Under reliable estimates for the percentage of completion method, which subtopic is essential?
• In capital budgeting, when is a project considered acceptable based on Net Present Value (NPV)?
• According to SOP 81-1, profit centers earn revenue from which types of contracts?
• How do lien waivers interact with progress payments and retainage?
• CCIP stands for?
• Which option is a remedy clause that addresses site conditions?
• Define percentage complete and describe how it is calculated.
• What is the principal source of legislative guidance for the construction industry in the IRS code?
• Define acceptable methods of revenue recognition for construction contracts under GAAP.
• Which condition is NOT a requirement for using the completed contract method?
• Which of the following is an exclusion or restriction under Commercial General Liability coverage?
• What is a wage structure?
• Wrap-up plans procurement covers whom?
• Which term describes base pay in wage structure?
• Under ASC 340-10, how are prepayments and allowances treated in financial statements?
• Which statement best describes costs to date in the percentage-of-completion method?
• In wage structure, what does the midpoint represent?
• In risk management, which technique involves budgeting for risk by retaining some risk?
• What is a contingency in construction project accounting, and how is it recorded?
• In a construction contract, owner-furnished materials refer to materials that are:
• What is the role of an overhead rate in allocating indirect costs?
• What do performance bonds guarantee?
• Which item is not among the eight items Chief Financial Managers look at when reviewing contracts?
• Which measures may be used to manage currency risk for international construction projects?
• What is the role of insurance (GL, workers' comp, builders risk) in financial risk management for contractors?
• Which statement of cash flow reporting method reports gross cash receipts and payments and separates interest income and interest expense?
• Which contract type recognizes revenue primarily based on the costs incurred plus a fee?
• How is encumbrance accounting used in construction budgeting?
• Which description best captures typical RAID usage in multi-user environments?
• Which of the following best represents external factors to consider in strategic planning?
• In a fixed price or lump sum contract, which statement is true?
• What is the first step in implementing Activity Based Costing (ABC)?
• What does Days In Inventory (DIO) represent in the cash conversion cycle?
• Which term refers to absolving a party from responsibility for their own actions?
• Under guaranteed cost rating plans, which technique reduces costs by graduated percent reductions based on premium level?
• What is a bid bond?
• Which expression represents a current liability under percentage-of-completion accounting?
• How does a cost-plus contract differ from a fixed-price contract in terms of revenue reporting?
• Which of the following is one of the three aspects unique to cash management in construction?
• Which of the following is NOT an external factor to consider in strategic planning?
• Which method of accounting (CCM OR POC) has the greatest impact from capital interest, and why?
• Aside from cost-to-cost and physical completion, which method is listed as an alternative for determining percentage of completion?
• Which component of SWOT corresponds to external factors such as regulatory issues?
• What is the exposure to Litigation and how should it be managed in a construction CFO role?
• Which statement best describes retainage in construction payments?
• Which of the following is least likely to be disclosed in notes to financial statements?
• What is the Look-Back requirement?
• In a Unit Price contract, which element is variable?
• Which statement describes course of performance in contract interpretation?
• Which organization is recognized for authoritative accounting standards, and when was it formed?
• Which term describes changes in the project scope that create additional work?
• Which statement best describes a key outcome of the Strategic Planning Process?
• What does LAN stand for?
• What are the primary components of a construction company's financial statements?
• In ABC, after tracing costs to activities, what is the purpose of linking cost drivers to cost objects?
• What is benchmarking?
• Which financing options are commonly used in construction to manage cash flow?
• What is the legal definition of a contract?
• How do incomplete or inaccurate project forecasts impact financial statements?
• Which of the following is a non-labor direct cost in construction?
• What is FASB preferred method of statement of cash flow reporting?
• Explain the cost-to-cost method in revenue recognition for long-term contracts.
• Which step analyzes alternatives including risks and additional capital costs?
• Which is a cash management tactic aimed at accelerating cash receipts?
• In a surety bond, who is the obligee?
• Which statement best reflects a documented positive outcome of strategic planning?
• Maintenance or warranty bonds guarantee what?
• What does Maximum wage refer to in wage structure?
• What is the Eichleay formula used for?
• Define internal controls over revenue recognition for contract accounting.
• What does the zero gross profit option under the Completed Contract Method involve?
• Which warranty category can be either written or oral and arises from negotiations?
• In a Unit Price contract, the total payment is determined by what calculation?
• Which statement best describes the purpose of capital budgeting?
• Umbrella liability is intended to provide coverage for what?
• In a retrospective rating plan, when is the premium determined?
• Which of the following is NOT a measurement standard for the percentage of completion method?
• In Activity Based Costing, after tracing costs to activities, what is the next step?
• Why is change orders validation important in revenue recognition for contracts?
• Suretyship is defined as what?
• Which principle describes how a trade handles disputed language?
• Which option represents a captive insurance arrangement?
• SOP is issued by which organization?
• Under IRC 460, how is a long-term contract defined?
• How is overhead rate applied in job costing?
• Which contract type typically involves reimbursement of allowable costs plus a fee and can include a GMP?
• Which two conditions must be met for indirect costs to be deferred as contract costs under completed contract or percentage-of-completion methods?
• Which of the following is an objective of financial managers?
• How should contingency be recorded and disclosed?
• When does a contract claim exist?
• Why is proper coding of change orders important in job costing?
• What are the two main types of warranties?
• What is the key difference between cloud computing and a virtual environment?
• What is the purpose of a job cost ledger and what key data should it contain?
• Which item is NOT a component of the Strategic Planning Process?
• Which of the following is NOT a requirement to use the percentage of completion method?
• What is the purpose of a lien waiver and when should it be obtained?
• Which statement correctly identifies CGL coverage triggers?
• Which metric is used to determine the payback period of a capital expenditure?
• Which category in the statement of cash flows includes the issuance of debt and equity?
• In a job cost system, how should change orders be classified?
• How is earned value management used in project controls?
• Which entities may use the Percentage of Completion method under IRS?
• How does project backlog relate to liquidity and profitability?
• What is unbilled receivables and how are they treated in financial statements?
• In project controls, how do a forecast and a budget differ?
• What is a prompt payment clause and why is it important?
• When are warranty liabilities recognized and how are they adjusted?
• What is retainage and how does it impact cash flow and reporting?
• Which statement of cash flows category generally involves current assets and current liabilities?
• What is the IRS threshold for small contractors to be exempt from the percentage of completion method?
• Which step should be written and used to measure progress in the strategic plan?
• Which concept is used to allocate home office overhead to a government's contract when claims are involved?
• What are the two limits of liability for a commercial general liability policy?
• What does a profitability index (PI) greater than 1 indicate?
• Which of the following is NOT a type of contract revenue issue in construction project reporting?
• According to SOP 81-1 what is a profit center?
• Explain the role of subcontractor payables and the importance of aging reports.
• Which statement describes the role of salvage value in depreciation calculations?
• Which statement best describes incentive and penalty provisions in contracts?
• Which statement accurately captures IRS criteria for a Home Construction Contract?
• Which statement best defines gross profit in project accounting?
• Which statement correctly identifies the measurement approaches used for the percentage of completion?
• Which statement best describes Alternate Dispute Resolution in contract law?
• Labor burden is calculated as what?
• Under the measurement of progress for long-term contracts, what is the role of monitoring estimated total costs?
• What is a labor & material payment bond?
• What is considered the major cause of contractor failure?
• Which of the following is an internal factor related to organizational culture in strategic planning?
• Under what circumstance would a contractor use the completed contract method?
• Define change orders and their effect on job cost and profitability analysis.
• What term describes jobs that function in a similar capacity?
• Which option is NOT a contract type listed in the material?
• Which guidance item is included in Notice 89-15?
• In earned value management, what does Planned Value (PV) represent?
• What does ABC stand for in cost accounting?
• Costs in excess of billings can indicate which problem?
• Which of the following is one of the main claim types related to site conditions?
• What is intercompany eliminations in the context of a parent/subsidiary structure?
• What does accurate cutoffs mean in revenue recognition controls?
• Which description best characterizes risk transfer in risk management?
• Which term describes jobs that have similar worth to the company?
• What are the four types of contracts?
• How should indirect costs (overhead) be allocated to jobs?
• Which of the following is an internal factor to consider in strategic planning?
• What is the critical path in project scheduling and its relation to cost control?
• In SWOT analysis, which element describes internal limitations that hinder performance?
• SOP 81-1 was issued in which year?