Michigan Residential Builders License Practice Test

What type of statement provides details of amounts owed to subcontractors and suppliers?

1. Invoice

2. Sworn statement

3. Service report

4. Progress report

The correct answer is: Sworn statement

A sworn statement is a formal document that provides a detailed account of amounts owed to subcontractors and suppliers. This statement is typically used in the construction industry to ensure transparency regarding financial obligations. It is often required by lenders and owners before disbursing payment, as it confirms that subcontractors and suppliers have been paid or will be paid for their work on the project. Sworn statements not only articulate the amounts owed but also certify the legitimacy of these claims, as they are made under oath. This adds a level of credibility and legal weight, protecting both the contractor and the project owner from potential disputes regarding payment. In contrast, invoices are more focused on individual transactions and requests for payment rather than a comprehensive overview of all financial commitments to subcontractors and suppliers. Service reports and progress reports typically provide updates on project status and work completed but do not detail financial obligations in the same manner as a sworn statement.