Exam Cheat Sheet · Quick Reference

Mississippi - Law and Business Management Exam

Mississippi  ·  PSI Services Contractor

Verified, not estimated. Every figure below is drawn from the official exam structure we maintain — question counts, passing standard and topic weighting. Practice questions are grounded in the source law with statute citations. We omit any figure we can't verify rather than guess at it.
Total questions
50
Passing score
70%
Exam time
120 min
Administered by
PSI Services Contractor
Format
Reference materials allowed

Mississippi State Portion 50 questions

Licensing 5 Q · 10%
When a contractor's license is required (commercial vs. residential dollar thresholds)Exemptions from commercial and residential licensing requirementsLicensing application process and required documentationFinancial requirements and insurance requirements for licensureLicense classifications (major and specialty classifications)Reciprocity agreements with other statesBidding requirements and Certificate of Responsibility number on bid envelopesDisciplinary actions, penalties, and appeals process
Estimating and Bidding 7 Q · 14%
Quantity take-off method for estimating materials and labor costsCalculating overhead percentages and adding markup for profit marginBid documents, addenda, and bid submission requirementsEthics in bidding: bid shopping, bid peddling, and bid riggingEstimating framework: project phases, task lists, and materials identificationLabor burden components and labor cost calculation formulaEquipment cost estimation: renting, leasing, and owning considerationsJob cost recording system and cost code structure
Lien Law 1 Q · 2%
Who is entitled to a mechanics' lien (contractors, subcontractors, materialmen, design professionals)Filing a claim of lien: timeline, location, and required contentNotice requirements after filing a claim of lien (registered/certified mail within 2 business days)Timeframe to commence payment action and lis pendens filing (180-day rule)Interim waiver and release upon payment: purpose, form requirements, and 60-day deemed-paid ruleWaiver and release upon final payment: form requirements and 60-day deemed-paid ruleAffidavit of nonpayment: when to file and notification requirementsPayment bond: amount requirement (110%), approval process, and suit deadline
Financial Management 5 Q · 10%
Bookkeeping practices and the accounting cycleFinancial statements (balance sheet, income statement, statement of cash flows)Financial ratio analysis (liquidity, quick, activity, debt, profitability, return on assets)Cash and accrual methods of accountingContract accounting methods (completed contract, percentage of completion, cost comparison)Cash flow management and accounts receivable collectionPayroll accounting and deductions (gross pay, net pay, FICA, federal income tax withholding)Equipment depreciation methods (straight-line and accelerated/MACRS)
Tax Laws 5 Q · 10%
Employer Identification Number (EIN) requirements and how to obtainFederal tax forms by business entity type (sole proprietor, partnership, corporation, S-corp)Federal employment taxes: FICA, federal income tax withholding, and FUTADeposit schedules and requirements for payroll taxesSelf-employment tax obligations and filing thresholdsTax penalties for late or incorrect depositsMississippi state taxes: income, franchise, sales/use, and withholding tax specificsInformation returns (Form 1099-MISC) and tax calendar deadlines
Labor Laws 5 Q · 10%
Fair Labor Standards Act (FLSA) minimum wage and overtime requirementsChild labor laws and restrictions for minors in constructionImmigration and Nationality Act Form I-9 employment eligibility verificationAmericans with Disabilities Act (ADA) employer obligations and reasonable accommodationsNew hire reporting requirements and penalties in MississippiOther federal labor laws protecting employee rights (Title VII, ADEA, FMLA, WARN, USERRA)Mississippi right-to-work status and union-related labor lawsRequired workplace postings under federal and Mississippi law
Project Management 5 Q · 10%
Scheduling methods: calendar, bar chart, and critical path method (CPM)Scheduling process: sequence of tasks, activity duration, contingency time, and float timeProject manager roles and responsibilitiesProject supervisory team roles: superintendent, foreman, materials expediter, architect and owner's representativeProject life cycle phases: pre-construction, construction, and job closeoutTracking project progress: daily reports and status reportsBudget and cost controls: materials management, purchase orders, and cost overrunsQuality assurance: specifications, shop drawings, internal inspections, and value engineering
Contracts 6 Q · 12%
Required elements of a binding contract (offer, acceptance, consideration, competent parties, legal purpose)Types of construction contracts (lump-sum, unit-price, cost-plus, turnkey, fast-track, multiple prime)Breach of contract (material vs. immaterial breach, liquidated damages, statute of limitations)Contract provisions for payment (progress payments, retainage, final payment documentation)Alternative dispute resolution methods (negotiation, mediation, collaborative law, arbitration)Risk-limiting contract provisions (force majeure, indemnification, warranties, delay extensions, differing site conditions)Change orders and contract modifications (addenda vs. modifications, change order requirements, claims resolution)Subcontracting requirements and Mississippi Prompt Pay obligations
Business Organization 2 Q · 4%
Sole proprietorship characteristics, advantages, and disadvantagesGeneral and limited partnership formation, liability, and dissolutionC corporation structure, taxation, and Mississippi registration requirementsS corporation eligibility requirements and pass-through taxationLimited Liability Company (LLC) structure, membership, and tax treatmentComparison of business structures by ownership, liability, taxation, and managementJoint venture requirements for Mississippi contractorsBusiness naming rules, trade names, trademarks, and Mississippi Secretary of State registration
Risk Management 4 Q · 8%
Types of insurance coverage for contractors (property, liability, CGL, automobile, BOP)Surety bonds: types, language, and qualifying requirementsWorkers' compensation coverage requirements under Mississippi lawEmployment-related insurance (unemployment insurance, social security, SUTA dumping)Bond claims process and payment in event of defaultLaws governing bonding of federal and Mississippi state public construction projects (Miller Act, Little Miller Act)Insurance coverage gaps, overlaps, and subcontractor insurance verificationRisk management benefits and risk assessment fundamentals
Environmental and Safety 5 Q · 10%
OSHA standards and recordkeeping requirements (Forms 300, 300A, 301)OSHA penalty types and enforcement proceduresHazardous materials identification and Safety Data Sheets (SDS)Lead-based paint regulations and Lead Pre-Renovation Education Rule (Lead PRE)Asbestos identification, notification, and abatement requirementsClean Water Act, NPDES stormwater permits, and erosion/sedimentation controlEnvironmental laws and regulatory agencies (EPA and Mississippi DEQ)Jobsite safety programs, substance abuse policies, and emergency action plans

Key Distinctions

Bid ShoppingvsBid Peddling

Bid shopping is when a general contractor reveals submitted bids to other subcontractors to seek a lower price, while bid peddling is when a losing subcontractor approaches the general contractor after award to undercut the winning bid.

NASCLA Contractors Guide, Page 7-2
ArbitratorvsMediator

An arbitrator acts as a judge and renders a legally binding decision, while a mediator only facilitates dialogue to help parties reach their own voluntary agreement.

NASCLA Contractors Guide, Chapter 8
Free Float TimevsTotal Float Time

Free float is the time an activity can be delayed without impacting the early start of the next activity, while total float is the leeway available without delaying the overall project completion date.

NASCLA Contractors Guide, Chapter 9 (Scheduling and Project Management)
Unit Price MethodvsQuantity Take-Off Method

The unit price method bundles all cost factors (labor, materials, equipment, subcontractors) into a single price per task, while the quantity take-off method estimates each component individually.

NASCLA Contractors Guide, Page 7-7
Leasing EquipmentvsPurchasing Equipment

Leasing returns obsolete equipment to the owner at lease end with no ownership transfer, while purchasing allows the contractor to retain salvage value and ownership.

NASCLA Contractors Guide, Page 7-5
Leasing EquipmentvsRenting Equipment

Leasing is a long-term contractual agreement that generally cannot be cancelled, while renting is costlier per use but best for short-term or specialized projects.

NASCLA Contractors Guide, Page 7-5
Major Classification (Commercial COR)vsSpecialty Classification (Commercial COR)

Major classifications include six categories (e.g., Building Construction, Electrical Work, Mechanical Work) requiring a $50,000 net worth, while specialty contractors perform work outside those six categories and require only a $20,000 net worth.

NASCLA Contractors Guide, Page 3 (Becoming a Licensed Contractor) and Board Rule 30-802-1.1, Section 2.i
Commercial Certificate of ResponsibilityvsResidential Builder/Remodeler License

A commercial COR requires a CPA-reviewed financial statement, a $400 application fee, and is triggered at $50,000 per job, while a residential license requires only a $50 fee and is triggered when improvements exceed $10,000.

NASCLA Contractors Guide, Page 3 (Becoming a Licensed Contractor) and MS Code § 31-3-1
Direct CostsvsIndirect Costs (Overhead)

Direct costs are project-specific expenses included in the estimate (labor, materials, equipment), while indirect costs such as small tools and pickup trucks are figured into project overhead rather than listed as direct project equipment.

NASCLA Contractors Guide, Page 7-4
Project OverheadvsCompany Overhead

Project overhead covers costs specific to a particular job and is calculated as a percentage of total revenue per project, while company overhead covers firm-wide operating costs also expressed as a percentage of total revenues.

NASCLA Contractors Guide, Page 7-6
Critical Path Method (CPM)vsBar Chart / Calendar Scheduling

CPM illustrates the interdependent relationships between construction tasks, while bar chart or calendar scheduling does not show interdependencies between activities.

NASCLA Contractors Guide, Chapter 9 (Scheduling and Project Management)
Sole ProprietorshipvsCorporation

A sole proprietorship is terminated upon the owner's death because its existence is tied directly to the owner, while a corporation has unlimited life independent of its owners.

NASCLA Contractors Guide, Page 2-1

Key Terms

Commercial Contractor License Threshold (Mississippi) NASCLA Contractors Guide, Page 3 (Becoming a Licensed Contractor) and MS Code § 31-3-1
Under MS Code § 31-3-1, a commercial contractor license is required for any contractor or subcontractor performing work exceeding $50,000 per job.
Residential Remodeler License Threshold (Mississippi) NASCLA Contractors Guide, Page 3 (Becoming a Licensed Contractor) and MS Code § 73-59-1
Under MS Code § 73-59-1, a residential remodeler license is required when the improvement to an existing residence exceeds $10,000.
Agricultural Building Exemption (Mississippi) MS Code § 73-59-15(1)(a) and NASCLA Contractors Guide, Page 3 (Becoming a Licensed Contractor)
Under MS Code § 73-59-15(1)(a), agricultural buildings, buildings used for agricultural purposes, community-effort buildings, and tenant houses are exempt from residential builder licensing requirements.
Certificate of Responsibility – Net Worth Requirement (Mississippi) NASCLA Contractors Guide, Page 3 (Becoming a Licensed Contractor) and Board Rule 30-802-1.1, Section 2.i
Per Board Rule 30-802-1.1, Section 2.i, applicants for major commercial classifications must have a minimum net worth of $50,000; specialty classifications require a minimum net worth of $20,000.
Certificate of Responsibility – General Liability Insurance (Mississippi) NASCLA Contractors Guide, Page 3 (Becoming a Licensed Contractor) and Board Rule 30-802-1.1, Section 2.j
Per Board Rule 30-802-1.1, Section 2.j, a commercial COR applicant must carry minimum general liability insurance of $300,000 per occurrence and $600,000 aggregate.
Qualifying Party Replacement Period (Mississippi) Board Rule 30-802-1.1, Section 2.l
Per Board Rule 30-802-1.1, Section 2.l, when a qualifying party leaves a company, the Board must be notified immediately and a new qualifying party must be identified within 90 days or the Certificate is subject to suspension or revocation.
Qualifying Party Entity Limit (Mississippi) MS Code § 31-3-13(a)
Per MS Code § 31-3-13(a), a qualifying party may serve no more than three separate entities without first appearing before the Board and receiving special permission.
False Application Penalty – Waiting Period (Mississippi) Board Rule 30-802-1.1, Section 4
Per Board Rule 30-802-1.1, Section 4, if any application information is found to be false, the certificate is terminated and no new or renewed certificate may be issued for five years.
Certificate of Responsibility Number on Bid Envelope (Mississippi) MS Code § 31-3-21(2) and NASCLA Contractors Guide, Page 3 (Becoming a Licensed Contractor)
Under MS Code § 31-3-21(2), all bids over $50,000 on public or private projects must show the contractor's current Certificate of Responsibility number on the outside of the bid envelope or the bid will not be opened.
Labor Burden NASCLA Contractors Guide, Page 7-4
Labor burden refers to employer obligations such as employment taxes and insurance that add approximately 30 percent to the base labor cost.
Addendum NASCLA Contractors Guide, Page 7-1
An addendum is a document issued when changes are made to a bid package before the bid due date; it becomes part of the bid documents and ultimately part of the contract when awarded.
Cost Code System NASCLA Contractors Guide, Page 7-8
A cost code system organizes job cost recording using three components: a project number, an activity classification code (e.g., CSI MasterFormat), and a distribution code identifying material, labor, equipment, or project overhead.
Federal Minimum Wage NASCLA Contractors Guide, Employee Management Chapter (Fair Labor Standards Act section)
Under the Fair Labor Standards Act, the federal minimum wage is $7.25 per hour (effective July 24, 2009); when a state rate differs, the employer must pay the higher of the two rates.
Mechanics' Lien Eligibility (Mississippi) NASCLA Contractors Guide, Page 16-1
Under MS Code § 85-7-403, contractors, subcontractors, materialmen, registered architects, professional engineers, and registered land surveyors are entitled to a mechanics' lien for services rendered on real estate.
Examination Passing Score (Mississippi Commercial COR) Board Rule 30-802-1.1, Section 9
Per Board Rule 30-802-1.1, Section 9, the passing score for the commercial Certificate of Responsibility examination is a grade of at least 70%.
Reciprocity – Unlimited License Requirement (Mississippi) NASCLA Contractors Guide, Page 3 (Becoming a Licensed Contractor) - Reciprocity section
To qualify for a reciprocal Certificate of Responsibility in Mississippi, an out-of-state contractor must hold an unlimited license in a reciprocating state and meet all conditions of the reciprocity agreement.

Formulas to Know

Labor Cost per TaskRequired Labor Hours × Labor Rate = Labor Cost per Task
Total Labor Cost Including BurdenLabor Cost per Task × (1 + Labor Burden Rate) = Total Labor Cost | e.g., $2,000 × 1.30 = $2,600
Equipment Unit Cost per HourTotal Annual Equipment Cost ÷ Estimated Annual Hours = Unit Cost per Hour
Project Equipment CostUnit Cost per Hour × Project Hours = Project Equipment Cost
Overhead PercentageOverhead Cost ÷ Total Revenue = Overhead Percentage | (apply separately for project overhead and company overhead)
Bid Price from Direct Costs + OverheadDirect Costs ÷ (1 − Total Overhead %) = Bid Price | e.g., $100,000 ÷ 0.80 = $125,000
Standard Industry MarkupBid Price = Total Costs × (1 + Markup %) | Standard markup = 15%
Job Cost Distribution CodeActivity Classification Code + Distribution Letter = Cost Code | e.g., 06200 (finish carpentry) + L (labor) = 06200L
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