Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
Chapter12: Liabilities: Off-balance-sheet Financing, Retirement Benefits, And Income Taxes
Section: Chapter Questions
Problem 2Q
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Question
1.What does a bid bond guarantee?
A contractor will sign the contract if his bid is selected
A contractor will pay his subcontractors for work performed on the project
A contractor has not colluded with other contractor in preparing his bid
The general contractor will use the subcontractors listed in the bid
A contractor has submitted a balanced bid
2.Which statement best describes the relationship between a contractor and a surety?
A surety and a contractor have an adversarial relationship
A contractor generally shops around and picks the surety will the lowest fee for a particular project
It is in the surety’s best financial interest for a contractor to default on a project
A contractor seeks the surety that will offer him the highest bonding limit
It is in the surety’s best interest for a contractor it bonds to be successful
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