Question

Labor is categorized as:

		Direct cost
		Projected indirect cost
		Fixed overhead
		None of the above

Working capital is identical to owner’s equity.

True

False

In accrual accounting, revenue earned but not billed should be recognized at closing.

True

False

Banks always use simple interest for construction loans.

True

False

Project insurance (builder’s risk) is categorized as:

		Direct cost
		Project indirect cost
		Fixed overhead
		None of the above

Answer 1

labour is categorized as direct cost because these expenses come out from the project budget directly

Working capital is identical to owner’s equity because working capital = assets- liabilities and for owner equity it is same

In accrual accounting, revenue earned but not billed should be recognized at closing. it is false

Banks always use simple interest for construction loans. because it is short term and high interest loan

Project insurance (builder’s risk) is categorized as:Fixed overhead because any type of insurance is overhead cost