Question 1
Six Sigma is best described as a program that:
Correct Answer:
Six Sigma is best described as a program that standardizes results and eliminates variation and can be third-party certified.
Explanation:
Six Sigma is a data-driven program focused on making processes predictable by reducing variation and defects. It uses a structured approach, typically DMAIC (Define-Measure-Analyze-Improve-Control), to define problems, measure how a process currently performs, identify root causes of variation, implement improvements, and put controls in place to maintain gains. Although it began in manufacturing, its methods apply to service processes as well, helping standardize results across different contexts. Certification and training paths (such as Green Belt and Black Belt) are common, with many organizations and independent bodies offering third-party certification. So the description that captures these elements—standardizing results, eliminating variation, and the possibility of third-party certification—best describes Six Sigma.
Question 2
Which asset is excluded by the quick ratio that is included in the current ratio?
Correct Answer:
Inventory
Explanation:
The essential idea is liquidity: the current ratio uses all current assets, while the quick ratio uses only the most liquid assets. Inventory sits in the current ratio because it can be turned into cash, but not as quickly as cash, marketable securities, or accounts receivable. The quick ratio excludes inventory for this reason, focusing only on assets that are readily convertible to cash in the near term. Therefore, the asset that is included in the current ratio but excluded by the quick ratio is inventory. (Cash and accounts receivable are included in both ratios, while prepaid expenses are generally not counted in the quick ratio.)
Question 3
Public sector projects will almost always use which options?
Correct Answer:
Both A and B
Explanation:
Public sector projects use contract approaches that fit different levels of scope definition and risk. A stipulated lump-sum (fixed-price) arrangement works well when the project scope is clear and well-defined, because it gives the owner price certainty and a straightforward bidding process. A contract based on a percentage of construction cost (cost-based fee) is used when the scope is less certain or there are many unknowns; it allows for flexibility and more accurate handling of costs as the project evolves, though it requires strong cost oversight. Because public projects may be procured under either scenario depending on the specifics, both types are commonly employed.
Question 4
Name a common cause of construction delays for which the owner or architect is at fault.
Correct Answer:
Change orders caused by the owner or architect
Explanation:
The key idea is that changes initiated by the owner or architect after construction has begun commonly cause delays. When the scope or design is altered, the team must produce new drawings and specifications, obtain approvals, possibly redo already completed work, and adjust schedules and sequencing of trades. This ripple effect pushes milestones and extends the project timeline, so owner- or architect-caused change orders are a frequent source of delay. Weather is an external factor beyond anyone’s control, so it’s not a fault of the owner or architect. If the contractor is behind, that reflects contractor performance, not owner/architect responsibility. Late material procurement can stem from various causes, not specifically owner or architect actions.
Question 5
Cash basis accounting is used to calculate taxes.
Correct Answer:
Cash basis
Explanation:
In tax accounting, the timing of income and deductions is determined by the method used. For most taxpayers, cash basis is used, meaning income is reported when cash or its equivalent is received and deductions are taken when cash is paid. This aligns tax liability with actual cash flow and keeps records simple for individuals and many small businesses. The accrual method, by contrast, records income when earned and expenses when incurred, regardless of cash movement, and is required for certain entities or situations (such as some large corporations or inventory scenarios) unless they qualify for the cash method. So the statement is true for the majority of taxpayers, making cash basis the best answer.
Question 1
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Prepare with the Amber Book Practice Management (PcM) Practice Test practice quiz. This question bank includes 10 questions covering described, ratio, architect, accounting, and rate. Use it to review important concepts, identify knowledge gaps, and build confidence for the related exam, course, or assessment.

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Amber Book Practice Management (PcM) Practice Test

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