CSLB CONTRACTORS LAW UPDATED ACTUAL EXAM QUESTIONS CORRECT ANSWERS
GRADED A PLUS
Question:
A prime contractor entered into a construction contract with a subcontractor. An employee of the
subcontractor was injured, but unfortunately the subcontractor had not secured workers'
compensation coverage. Which of the following statements best describes the situation, except in
cases of fraud? A. The subcontractor is guilty, but the prime contractor is not responsible. B. The
prime contractor is guilty, but the subcontractor is not responsible. C. Neither the prime contractor
nor the subcontractor are responsible. D. The subcontractor is guilty, but the prime contractor must
take responsibility for the injuries.
Answer:
The subcontractor is guilty, but the prime contractor must take responsibility for the injuries.
Question:
Your accountant advises you to set up a cost management system. What does a cost management
system do?
Answer:
A cost management system gives a cost history to analyze labor and material costs.
Question:
before beginning work, an employer or contractor must inquire whether asbestos is present in any
building constructed prior to:
Answer:
Question:
What does it mean when a subcontractor signs a waiver and release form on a public works project?
,Answer:
The subcontractor gives up the right to lien the construction funds.
Question:
A contractor is looking for an insurance policy to cover a high degree of exposure to risk. Of the
following, which policy would be the best for this purpose? A. Property B. General Liability C.
Builder's Risk D. Umbrella
Answer:
Umbrella policy. But the umbrella policy would only cover the high degree of exposure if it was
covered by one of the underlying policies.
Question:
Which of the following is considered a direct cost? A. Telephone use by employees B. Personal
Vehicle C. Insurance. D. Payroll Tax
Answer:
Payroll tax is considered a direct cost.
Question:
How many days does a contractor have to notify the Registrar after being issued a workers'
compensation insurance policy?
Answer:
A contractor has 90 days to notify the Registrar after being issued a workers' compensation
insurance policy.
Question:
When balancing the accounts receivable which of the following would have no effect? A. Posting to
the wrong accounts-receivable account. B. Crediting instead of debiting the accounts-receivable
account. C. Debiting instead of crediting the accounts-receivable account. D. Posting a receivable to
an accounts-payable account.
Answer:
, Posting to the wrong accounts-receivable account.
Question:
What kind of discount do lumber yards and other supplies offer to contractors who pay their bill
promptly?
Answer:
1%-2% discount.
Question:
Of the following, which document is usually delivered first in a transaction involving a home
improvement contract? A. Three-day notice of right to cancel B. The contract C. "Notice to Owner"
D. 20-Day preliminary notice
Answer:
The "Notice to Owner" At the time this question was written, the "Notice to Owner" was required to
be given to the client "prior to entering into a contract with an owner for work specified as home
improvement or swimming pool construction." Since then, several of the consumer protection laws
covering Home Improvement Contracts have been revised to make them easier for the average
homeowner to understand. The "Mechanics Lien Warning" has replaced the "Notice to Owner" and
is included as part of the contract rather than given to the client in advance. Despite the changes in
the laws, the CSLB still refers to "Notice to Owner" in several current publications as well as on
their website. Without any evidence to the contrary, we must assume that the question may still be
an active question in the database. If this question still appears as written here, then the correct
answer is "Notice to Owner." A three-day notice of right to cancel is also included as part of the
contract, but is not required if the contract is negotiated at the contractor's place of business. A
20-day Preliminary Notice is typically delivered by the subcontractor when he or she starts work,
but can be delivered later.
Question:
Ms. Gomez applies for a job. Of the following, the only reason an employer may lawfully deny her
employment is: A. She is over 50 years of age B. She is Hispanic and everyone else is
African-American or Caucasian C. Lifting is involved and she is a woman. D. She has no work
experience or Social Security Number.
Answer:
GRADED A PLUS
Question:
A prime contractor entered into a construction contract with a subcontractor. An employee of the
subcontractor was injured, but unfortunately the subcontractor had not secured workers'
compensation coverage. Which of the following statements best describes the situation, except in
cases of fraud? A. The subcontractor is guilty, but the prime contractor is not responsible. B. The
prime contractor is guilty, but the subcontractor is not responsible. C. Neither the prime contractor
nor the subcontractor are responsible. D. The subcontractor is guilty, but the prime contractor must
take responsibility for the injuries.
Answer:
The subcontractor is guilty, but the prime contractor must take responsibility for the injuries.
Question:
Your accountant advises you to set up a cost management system. What does a cost management
system do?
Answer:
A cost management system gives a cost history to analyze labor and material costs.
Question:
before beginning work, an employer or contractor must inquire whether asbestos is present in any
building constructed prior to:
Answer:
Question:
What does it mean when a subcontractor signs a waiver and release form on a public works project?
,Answer:
The subcontractor gives up the right to lien the construction funds.
Question:
A contractor is looking for an insurance policy to cover a high degree of exposure to risk. Of the
following, which policy would be the best for this purpose? A. Property B. General Liability C.
Builder's Risk D. Umbrella
Answer:
Umbrella policy. But the umbrella policy would only cover the high degree of exposure if it was
covered by one of the underlying policies.
Question:
Which of the following is considered a direct cost? A. Telephone use by employees B. Personal
Vehicle C. Insurance. D. Payroll Tax
Answer:
Payroll tax is considered a direct cost.
Question:
How many days does a contractor have to notify the Registrar after being issued a workers'
compensation insurance policy?
Answer:
A contractor has 90 days to notify the Registrar after being issued a workers' compensation
insurance policy.
Question:
When balancing the accounts receivable which of the following would have no effect? A. Posting to
the wrong accounts-receivable account. B. Crediting instead of debiting the accounts-receivable
account. C. Debiting instead of crediting the accounts-receivable account. D. Posting a receivable to
an accounts-payable account.
Answer:
, Posting to the wrong accounts-receivable account.
Question:
What kind of discount do lumber yards and other supplies offer to contractors who pay their bill
promptly?
Answer:
1%-2% discount.
Question:
Of the following, which document is usually delivered first in a transaction involving a home
improvement contract? A. Three-day notice of right to cancel B. The contract C. "Notice to Owner"
D. 20-Day preliminary notice
Answer:
The "Notice to Owner" At the time this question was written, the "Notice to Owner" was required to
be given to the client "prior to entering into a contract with an owner for work specified as home
improvement or swimming pool construction." Since then, several of the consumer protection laws
covering Home Improvement Contracts have been revised to make them easier for the average
homeowner to understand. The "Mechanics Lien Warning" has replaced the "Notice to Owner" and
is included as part of the contract rather than given to the client in advance. Despite the changes in
the laws, the CSLB still refers to "Notice to Owner" in several current publications as well as on
their website. Without any evidence to the contrary, we must assume that the question may still be
an active question in the database. If this question still appears as written here, then the correct
answer is "Notice to Owner." A three-day notice of right to cancel is also included as part of the
contract, but is not required if the contract is negotiated at the contractor's place of business. A
20-day Preliminary Notice is typically delivered by the subcontractor when he or she starts work,
but can be delivered later.
Question:
Ms. Gomez applies for a job. Of the following, the only reason an employer may lawfully deny her
employment is: A. She is over 50 years of age B. She is Hispanic and everyone else is
African-American or Caucasian C. Lifting is involved and she is a woman. D. She has no work
experience or Social Security Number.
Answer:
