CSLB CONTRACTOR'S LAW &
BUSINESS EXAM QUESTIONS WITH
CORRECT ANSWERS
For which of the following injuries does Cal/OSHA require employers to make and keep
records?
A. Worker is knocked unconscious but returns to work after resting for one hour.
B. Worker suffers a burn that requires a one-time visit to the doctor.
C. Worker develops a chronic allergy after repeated exposure to fiberglass insulation.
D. All of the above. - Answer-A worker develops a chronic allergy after repeated
exposure to fiberglass insulation.
All would be kept for contractor records however when employee is exposed to
asbestos that is mandatory report. If an employee misses one day or more of work or is
hospitalized that would also be mandatory.
As part of the safety training process, contractors' supervisors are required to meet with
management how often? - Answer-Contractors supervisors are required to meet with
management monthly in regards to the safety training process.
Using money from a current job to pay for unrelated projects is called: - Answer-
Diversion is when you use money from a current job to pay for unrelated projects.
Direct costs are $7,200, overhead is 12%, and profit is 10%. What is the selling price? -
Answer-$9,230.77
Take 10% plus 10%=22% subtract 22% from 100 %= 78% now divide the total cost of
$7,200 by 78%=$9,230.76 round up to $9,230.77.
Excavators must clearly mark the boundaries of a work area, usually with what color
paint. - Answer-Excavators usually mark boundaries of a work area with white paint.
Suppose you include depreciation on your income statement your first year in business,
but you do not include it in the second year. How will this affect your net income being
reported? - Answer-Your net income will be greater than it should be in the second year.
How many days of inactivity must pass before a notice of cessation may be recorded? -
Answer-30 days of inactivity must pass before a notice of cessation may be recorded.
,A RME may act as the qualifier for no more than ________ firms in any one-year
period.
A. One
B. Two
C. Three
D. Four - Answer-A RME may only act as the qualifier for one firm in any one year
period.
Which of the following is not covered by standard contractor's insurance policies?
A. Employees' tools
B. Contractor's tools
C. Damage from fire, storm, theft, and vandalism
D. Job materials - Answer-If a contractor had a builders risk policy, a general liability
policy, and a inland marine policy as a standard guideline, employees tools would not
be covered by any of the standard policies.
Unsafe or faulty equipment is found on a job site. What should be done?. - Answer-It is
the contractor's responsibility to correct the problem.
Who furnishes MSDS sheets? - Answer-The supplier is who should furnish MSDS
sheets.
At the end of each month, data is posted from the bookkeeping journals to the: -
Answer-At the end of each month data should be posted from the bookkeeping journal
to the general ledger.
Except in an emergency, you must notify the regional Underground Service Alert
Notification Center no less than _____ nor more than _____ starting excavation work.
A. 1 day before ... 14 days before
B. 2 days before ... 14 days after
C. 2 days before ... 14 days before
D. 3 days before ... 28 days after - Answer-You must notify the regional UAS alert
notification center at least 2 days before and no more than 14 days before starting
excavation work.
If you are a subcontractor, there are three general steps in the mechanics' lien
procedure to make sure you are paid for works of improvement upon property. Step 1:
Determine the exact legal description of the property (map book, page, etc.). Step 2:
Step 3: Complete the work and record a Claim of Lien if you are not paid on time. What
is Step 2?
A. Request prepayment for your work.
B. Serve a preliminary 20-day notice.
, C. Run credit checks on the owner and prime contractor.
D. List the attorney representing the subcontractor. - Answer-If you are a subcontractor
the three steps of the mechanics' lien procedure to make sure you are paid for your
work are Step 1: Determine the exact legal description of the property (map book, page,
etc.) Step 2: Serve preliminary 20-day notice. Step: 3 Complete the work and record a
Claim of Lien if you are not paid on time.
Before you build on a landfill you must notify: - Answer-The government and the
engineers.
If a building permit is required, when does the law permit a building inspector to enter
and inspect a residence? - Answer-The law permits an inspector to enter and inspect a
residence between 8 am and 6 pm unless the owner has given permission to inspect at
some other time.
When a joint control addendum is used, which of the following does not have to be
included in a home improvement contract?
A. Owner's signature
B. Schedule of payments
C. Notice to Owner
D. License number of the contractor - Answer-A schedule of payments does not need to
be included in a home improvement contract if a joint control addendum is used.
A contractor is bidding on a project for a homeowner. The homeowner has included
several "extra" items to be bid upon. After receiving the bid, the homeowner said it was
too high and asked the contractor to lower the price. What should the contractor do? -
Answer-Negotiate with the homeowner to reduce the scope of the work by eliminating
some of the extra items.
A balance sheet shows: - Answer-A balance sheet shows assets and liabilities at a
certain point in time.
Which of the following are employees NOT required to learn?
A. CPR
B. How to conduct tailgate safety meetings
C. Safety features of tools
D. First-aid procedures - Answer-Employees are required to learn safety features of
tools, first-aid procedures and how to conduct tailgate safety meetings.
They are not required to learn CPR.
A contractor buys a construction firm from a person who is retiring. There is an existing
collective bargaining agreement with a successor clause that is good for three years. As
the new owner, is the contractor bound by the collective bargaining agreement? -
BUSINESS EXAM QUESTIONS WITH
CORRECT ANSWERS
For which of the following injuries does Cal/OSHA require employers to make and keep
records?
A. Worker is knocked unconscious but returns to work after resting for one hour.
B. Worker suffers a burn that requires a one-time visit to the doctor.
C. Worker develops a chronic allergy after repeated exposure to fiberglass insulation.
D. All of the above. - Answer-A worker develops a chronic allergy after repeated
exposure to fiberglass insulation.
All would be kept for contractor records however when employee is exposed to
asbestos that is mandatory report. If an employee misses one day or more of work or is
hospitalized that would also be mandatory.
As part of the safety training process, contractors' supervisors are required to meet with
management how often? - Answer-Contractors supervisors are required to meet with
management monthly in regards to the safety training process.
Using money from a current job to pay for unrelated projects is called: - Answer-
Diversion is when you use money from a current job to pay for unrelated projects.
Direct costs are $7,200, overhead is 12%, and profit is 10%. What is the selling price? -
Answer-$9,230.77
Take 10% plus 10%=22% subtract 22% from 100 %= 78% now divide the total cost of
$7,200 by 78%=$9,230.76 round up to $9,230.77.
Excavators must clearly mark the boundaries of a work area, usually with what color
paint. - Answer-Excavators usually mark boundaries of a work area with white paint.
Suppose you include depreciation on your income statement your first year in business,
but you do not include it in the second year. How will this affect your net income being
reported? - Answer-Your net income will be greater than it should be in the second year.
How many days of inactivity must pass before a notice of cessation may be recorded? -
Answer-30 days of inactivity must pass before a notice of cessation may be recorded.
,A RME may act as the qualifier for no more than ________ firms in any one-year
period.
A. One
B. Two
C. Three
D. Four - Answer-A RME may only act as the qualifier for one firm in any one year
period.
Which of the following is not covered by standard contractor's insurance policies?
A. Employees' tools
B. Contractor's tools
C. Damage from fire, storm, theft, and vandalism
D. Job materials - Answer-If a contractor had a builders risk policy, a general liability
policy, and a inland marine policy as a standard guideline, employees tools would not
be covered by any of the standard policies.
Unsafe or faulty equipment is found on a job site. What should be done?. - Answer-It is
the contractor's responsibility to correct the problem.
Who furnishes MSDS sheets? - Answer-The supplier is who should furnish MSDS
sheets.
At the end of each month, data is posted from the bookkeeping journals to the: -
Answer-At the end of each month data should be posted from the bookkeeping journal
to the general ledger.
Except in an emergency, you must notify the regional Underground Service Alert
Notification Center no less than _____ nor more than _____ starting excavation work.
A. 1 day before ... 14 days before
B. 2 days before ... 14 days after
C. 2 days before ... 14 days before
D. 3 days before ... 28 days after - Answer-You must notify the regional UAS alert
notification center at least 2 days before and no more than 14 days before starting
excavation work.
If you are a subcontractor, there are three general steps in the mechanics' lien
procedure to make sure you are paid for works of improvement upon property. Step 1:
Determine the exact legal description of the property (map book, page, etc.). Step 2:
Step 3: Complete the work and record a Claim of Lien if you are not paid on time. What
is Step 2?
A. Request prepayment for your work.
B. Serve a preliminary 20-day notice.
, C. Run credit checks on the owner and prime contractor.
D. List the attorney representing the subcontractor. - Answer-If you are a subcontractor
the three steps of the mechanics' lien procedure to make sure you are paid for your
work are Step 1: Determine the exact legal description of the property (map book, page,
etc.) Step 2: Serve preliminary 20-day notice. Step: 3 Complete the work and record a
Claim of Lien if you are not paid on time.
Before you build on a landfill you must notify: - Answer-The government and the
engineers.
If a building permit is required, when does the law permit a building inspector to enter
and inspect a residence? - Answer-The law permits an inspector to enter and inspect a
residence between 8 am and 6 pm unless the owner has given permission to inspect at
some other time.
When a joint control addendum is used, which of the following does not have to be
included in a home improvement contract?
A. Owner's signature
B. Schedule of payments
C. Notice to Owner
D. License number of the contractor - Answer-A schedule of payments does not need to
be included in a home improvement contract if a joint control addendum is used.
A contractor is bidding on a project for a homeowner. The homeowner has included
several "extra" items to be bid upon. After receiving the bid, the homeowner said it was
too high and asked the contractor to lower the price. What should the contractor do? -
Answer-Negotiate with the homeowner to reduce the scope of the work by eliminating
some of the extra items.
A balance sheet shows: - Answer-A balance sheet shows assets and liabilities at a
certain point in time.
Which of the following are employees NOT required to learn?
A. CPR
B. How to conduct tailgate safety meetings
C. Safety features of tools
D. First-aid procedures - Answer-Employees are required to learn safety features of
tools, first-aid procedures and how to conduct tailgate safety meetings.
They are not required to learn CPR.
A contractor buys a construction firm from a person who is retiring. There is an existing
collective bargaining agreement with a successor clause that is good for three years. As
the new owner, is the contractor bound by the collective bargaining agreement? -
