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CALIFORNIA STATE CONTRACTORS LICENSE
LAW AND BUSINESS EXAM 2026 ALL
QUESTIONS AND CORRECT DETAILED
ANSWERS ALREADY A GRADED WITH EXPERT
FEEDBACK |NEW AND REVISED
A contractor is not prohibited from taking and executing a contract
involving the use of two or more crafts or trades, if the performance of
the work is _____ and supplemental to the primary job. - ANSWER-
Incidental and supplemental to the primary job. Otherwise it must be
performed by a sub.
Can you use funds from one project to finish another? - ANSWER- No.
This falls under the category of Larceny and is a misdemeanor or felony.
Is it a crime to use false or misleading advertising? - ANSWER- Yes. It
is a misdemeanor.
What is a joint venture license? - ANSWER- Two or more qualifiers of
different licenses who seek to combine their licenses and expertise for a
specific project.
How long is a joint venture valid for? - ANSWER- 2 years after first
given.
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If a QP leaves, what can the remaining party file to get more time? -
ANSWER- A continuance of up to 1 year in order to complete the
project.
If a QP leaves, the remaining party has __ days to report it to the state. -
ANSWER- 90 days
What must qualifiers do every day regarding to the job site? -
ANSWER- visit the site daily.
When must the subcontractors be paid? - ANSWER- 7 days after each
progress payment by the owner to the direct contractor.
____ is the task of preparing a detailed cost estimate for the job,
including material. labor, overhead, as well as the profit or mark-up. -
ANSWER- Bidding
Materials, labor, permits, loan fees, subs, are all considered what type of
costs? - ANSWER- Direct Costs
Office space rent, office supplies, advertising, staff, insurance, and
utility bills are considered what type of costs? - ANSWER- Overhead
costs
Equipment maintenance, truck maintenance, lubrication, tools, fuel,
equipment are considered what type of costs? - ANSWER- Indirect
Costs
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Written offers from contractors to undertake a construction job in return
for a sum of money which can be negotiated, limited or selective
competition, or an open competition. - ANSWER- Construction bid
The 3 essential estimates needed to determine your "mark up" -
ANSWER- Gross Income, Overhead expenses, Net profit desired.
The industry average for Net profit percentage is... - ANSWER- 6%
What is the formula for determining "mark up". - ANSWER- OE + NP =
A1...GI - A1= JC...GI / JC = Mark up
Where is the best place to look for bidding advice? - ANSWER- Recent
job history.
Do sales tax costs need to be included in the bid estimate? - ANSWER-
Yes
If the subs bid is too low, should you let him know? - ANSWER- Yes, it
is ethical and good practice to call the sub and inform him when the bid
is too high or low.
Should you build against code if the customer insists? - ANSWER- No.
It is illegal to build against code.
CALIFORNIA STATE CONTRACTORS LICENSE
LAW AND BUSINESS EXAM 2026 ALL
QUESTIONS AND CORRECT DETAILED
ANSWERS ALREADY A GRADED WITH EXPERT
FEEDBACK |NEW AND REVISED
A contractor is not prohibited from taking and executing a contract
involving the use of two or more crafts or trades, if the performance of
the work is _____ and supplemental to the primary job. - ANSWER-
Incidental and supplemental to the primary job. Otherwise it must be
performed by a sub.
Can you use funds from one project to finish another? - ANSWER- No.
This falls under the category of Larceny and is a misdemeanor or felony.
Is it a crime to use false or misleading advertising? - ANSWER- Yes. It
is a misdemeanor.
What is a joint venture license? - ANSWER- Two or more qualifiers of
different licenses who seek to combine their licenses and expertise for a
specific project.
How long is a joint venture valid for? - ANSWER- 2 years after first
given.
,2|Page
If a QP leaves, what can the remaining party file to get more time? -
ANSWER- A continuance of up to 1 year in order to complete the
project.
If a QP leaves, the remaining party has __ days to report it to the state. -
ANSWER- 90 days
What must qualifiers do every day regarding to the job site? -
ANSWER- visit the site daily.
When must the subcontractors be paid? - ANSWER- 7 days after each
progress payment by the owner to the direct contractor.
____ is the task of preparing a detailed cost estimate for the job,
including material. labor, overhead, as well as the profit or mark-up. -
ANSWER- Bidding
Materials, labor, permits, loan fees, subs, are all considered what type of
costs? - ANSWER- Direct Costs
Office space rent, office supplies, advertising, staff, insurance, and
utility bills are considered what type of costs? - ANSWER- Overhead
costs
Equipment maintenance, truck maintenance, lubrication, tools, fuel,
equipment are considered what type of costs? - ANSWER- Indirect
Costs
, 3|Page
Written offers from contractors to undertake a construction job in return
for a sum of money which can be negotiated, limited or selective
competition, or an open competition. - ANSWER- Construction bid
The 3 essential estimates needed to determine your "mark up" -
ANSWER- Gross Income, Overhead expenses, Net profit desired.
The industry average for Net profit percentage is... - ANSWER- 6%
What is the formula for determining "mark up". - ANSWER- OE + NP =
A1...GI - A1= JC...GI / JC = Mark up
Where is the best place to look for bidding advice? - ANSWER- Recent
job history.
Do sales tax costs need to be included in the bid estimate? - ANSWER-
Yes
If the subs bid is too low, should you let him know? - ANSWER- Yes, it
is ethical and good practice to call the sub and inform him when the bid
is too high or low.
Should you build against code if the customer insists? - ANSWER- No.
It is illegal to build against code.
