West Virginia Contractors License Practice Exam

What type of documentation must be maintained for a contractor's tax records?

1. Project blueprints

2. Invoices and receipts

3. Customer feedback forms

4. Time sheets

The correct answer is: Invoices and receipts

Maintaining invoices and receipts is crucial for a contractor's tax records because these documents provide the necessary proof of income and expenses incurred during business operations. The invoices act as records of sales or services provided, detailing amounts owed by clients, while receipts serve as evidence of payments made for materials, labor, or any other expenses. This documentation is essential for accurate tax reporting and can be used to justify deductions, ensuring compliance with tax regulations. While project blueprints, customer feedback forms, and time sheets may be important for project management and customer relations, they do not directly relate to financial transactions in the way that invoices and receipts do.