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Recertification
Sample
Questions
Sample
1
Which
of
the
following
is
an
example
of
qualifying
assets
that
warrant
capitalization
of
interest?
-
Inventories
manufactured
on
a
repetitive
basis
-
Assets
acquired
with
gifts
and
grants
-
Investments
accounted
for
using
the
equity
method
-
Assets
constructed
and
intended
for
sale
or
lease
Sample
2
A
contractor
is
awarded
a
contract
by
a
school
district.
The
contract
requires
a
guarantee
that
the
contractor
will
perform
the
terms
and
conditions
of
the
contract
and
that
the
project
will
be
built
according
to
the
plans
and
specifications.
Which
type
of
bond
will
enable
the
contractor
to
provide
the
required
guarantee?
-
Bid
-
Performance
-
Labor
and
material
payment
-
Warranty
Sample
3
Two
companies
form
a
joint
venture.
Company
A
contributes
$100,000.
Company
B
contributes
construction
equipment
with
a
fair
market
value
established
by
the
venture
partners
of
$100,000.
Company
B’s
depreciated
cost
of
the
equipment
is
$60,000.
There
are
no
cash
withdrawals
by
the
venture
partners.
Each
partner
receives
50%
ownership
and
joint
control
over
the
joint
venture.
What
should
Company
A
and
Company
B
show
on
their
respective
financial
statements
as
their
initial
investment
in
the
joint
venture?
-
Company
A
–
$100,000;
Company
B
–
$100,000
-
Company
A
–
$100,000;
Company
B
–
$60,000
-
Company
A
–
$100,000;
Company
B
–
$40,000
-
Company
A
–
$60,000;
Company
B
–
$60,000
Sample
4
Under
the
completed-contract
method
of
accounting,
contract
revenue
and
costs
are
recognized
when
the:
-
Contract
is
billed
in
full
-
Final
retainage
is
collected
-
Warranty
has
expired
-
Project
is
completed
Sample
5
A
road
building
company
will
acquire
a
site
in
a
nearby
community
and
build
a
new
batch
plant
on
it.
The
following
are
expenditures
that
will
be
incurred
prior
to
placing
the
new
plant
in
service:
| Freight
to
bring
in
the
new
equipment
|
$17,000 |
| Equipment
cost
|
$240,000 |
| Installation
and
set-up
cost
|
$36,000 |
| Cost
of
land
at
the
new
site |
$45,000 |
| Sales
tax
on
equipment |
$12,000 |
| 3-year
maintenance
contract
for
equipment |
$30,000 |
What
is
the
basis
for
computing
depreciation
for
the
new
facility?
-
$269,000
-
$305,000
-
$350,000
-
$380,000
Sample
6
In
which
phase
of
the
contract
life
cycle
does
a
contractor
have
the
opportunity
to
influence
the
contract
terms
and
conditions?
-
Pre-bid
or
bid
-
Contract
award
-
Contract
performance
-
Contract
completion
Sample
7
In
August
2003,
a
contractor
who
uses
the
percentage-of-completion
method
of
accounting
and
the
output
method
won
a
$21,000,000
contract
to
construct
200
miles
of
highway.
The
project
was
expected
to
last
20
months,
take
800,000
hours
to
complete,
and
cost
$20,000,000.
The
following
data
pertain
to
the
construction
period:
| Costs
to
date |
$4,000,000 |
| Estimated
costs
to
complete |
$16,000,000 |
| Labor
hours
incurred
|
150,000 |
| Estimated
labor
hours
to
complete |
650,000 |
| Miles
completed |
35 |
What
amount
of
revenue
should
be
recognized
in
2003?
-
$3,675,000
-
$3,937,500
-
$4,200,000
-
$5,250,000
Sample
8
The
Jobs
and
Growth
Tax
Relief
Reconciliation
Act
of
2003
increased
the
maximum
amount
of
qualified
property
that
may
be
deducted
under
IRC
§179
to:
-
$25,000
-
$50,000
-
$75,000
-
$100,000
Sample
9
The
primary
goal
of
an
incentive
compensation
plan
is
to:
-
Satisfy
the
requirements
of
the
Fair
Labor
Standards
Act
-
Motivate
salaried
employees
-
Motivate
group
performance
to
achieve
the
company’s
identified
goals
-
Provide
tax-deferred
retirement
benefits
Sample
10
A
construction
company
is
a
semiweekly
depositor
of
payroll
taxes.
The
company
paid
annual
bonuses
to
employees
on
Tuesday,
December
31,
2002.
The
tax
liability
for
the
bonus
payroll
was
$105,000.
On
Friday,
January
3,
2003,
employees
received
their
regular
weekly
pay
for
which
the
company
incurred
a
$35,000
payroll
tax
liability.
What
is
the
latest
date
by
which
the
company
must
make
a
payroll
tax
deposit
to
avoid
late
penalties?
-
$105,000
must
be
deposited
by
Thursday,
January
2,
2003
and
$35,000
by
Wednesday,
January
8,
2003
-
$105,000
must
be
deposited
by
Friday,
January
3,
2003
and
$35,000
by
Wednesday,
January
8,
2003
-
$140,000
must
be
deposited
by
Wednesday,
January
8,
2003
-
$140,000
must
be
deposited
by
Friday,
January
3,
2003
Please
note
that
the
difficulty
of
these
sample
questions
may
not
be
representative
of
the
overall
difficulty
of
the
exam.
Answer
Key:
1:D,
2:B,
3:B,
4:D,
5:B,
6:B,
7:A,
8:D,
9:C,
10:A
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