CSLB CONTRACTOR'S LAW & BUSINESS EXAM 2
Simplified Exam Questions with 100% Correct Answers
Which of the following is a correct statement about budgets?
A. Budgets do not require accurate books.
B. Budgets do not require detailed cost information.
C. The goal of a budget is to forecast expenses as accurately as possible.
D. A budget should allow leeway for month-to-month variations. - A budget should allow
leeway for month-to-month variations.
How often should the safety supervisor be at the job site? - It depends on the work being
done.
There is a near-miss safety situation on a job. What steps should the employer take? - The
unsafe situation must be investigated, and the investigation must include a written report.
How should the prime contractor determine whether a subcontractor has workers' compensation
insurance? - The prime contractor should ask to see the expiration date on the sub's
certificate of insurance.
In most construction contracts, the retention may be held for up to _____ days as a guarantee that
the prime pays the subcontractors and suppliers. - Retention may be held for up to 60 days.
A contractor bids on a home improvement project and earns the bid. Later, he decides not to take
the job. Which bond would protect the home owner? - A bid bond would protect the client
from a contractor who declines to take a job that has already bid.
Of the following, which is the best description of "accounts receivable"?
, A. Money due from customers who have purchased goods or services on credit.
B. Business costs and expenses due and payable within the current accounting period.
C Accounts listed on the liability side of the balance sheet.
D. Money owed to material suppliers for credit purchases. - Money due from customers who
have purchased goods or services on credit.
What is used to analyze the income and outflow of cash during a period of time? - A cash
flow statement is used to analyze the income and outflow of cash.
A consumer may cancel a home solicitation contract at any time prior to midnight of the _____
after the date of the transaction.
A. 2nd business day
B. 3rd business day
C. 5th business day
D. 7th calendar day - A consumer may cancel a home solicitation contract at anytime prior to
midnight of the 3rd business day after the date of the transaction.
When preparing a bid you should:
A. Evaluate the effect of unexpected delays on costs
B. Put as little in writing as possible
C. Schedule the job to slightly overload your capacity
D. None of the above - Evaluate the effect of unexpected delays on costs.
Where must a contractor include the "Notice to Owner"? - In all home improvement
contracts over $500
Simplified Exam Questions with 100% Correct Answers
Which of the following is a correct statement about budgets?
A. Budgets do not require accurate books.
B. Budgets do not require detailed cost information.
C. The goal of a budget is to forecast expenses as accurately as possible.
D. A budget should allow leeway for month-to-month variations. - A budget should allow
leeway for month-to-month variations.
How often should the safety supervisor be at the job site? - It depends on the work being
done.
There is a near-miss safety situation on a job. What steps should the employer take? - The
unsafe situation must be investigated, and the investigation must include a written report.
How should the prime contractor determine whether a subcontractor has workers' compensation
insurance? - The prime contractor should ask to see the expiration date on the sub's
certificate of insurance.
In most construction contracts, the retention may be held for up to _____ days as a guarantee that
the prime pays the subcontractors and suppliers. - Retention may be held for up to 60 days.
A contractor bids on a home improvement project and earns the bid. Later, he decides not to take
the job. Which bond would protect the home owner? - A bid bond would protect the client
from a contractor who declines to take a job that has already bid.
Of the following, which is the best description of "accounts receivable"?
, A. Money due from customers who have purchased goods or services on credit.
B. Business costs and expenses due and payable within the current accounting period.
C Accounts listed on the liability side of the balance sheet.
D. Money owed to material suppliers for credit purchases. - Money due from customers who
have purchased goods or services on credit.
What is used to analyze the income and outflow of cash during a period of time? - A cash
flow statement is used to analyze the income and outflow of cash.
A consumer may cancel a home solicitation contract at any time prior to midnight of the _____
after the date of the transaction.
A. 2nd business day
B. 3rd business day
C. 5th business day
D. 7th calendar day - A consumer may cancel a home solicitation contract at anytime prior to
midnight of the 3rd business day after the date of the transaction.
When preparing a bid you should:
A. Evaluate the effect of unexpected delays on costs
B. Put as little in writing as possible
C. Schedule the job to slightly overload your capacity
D. None of the above - Evaluate the effect of unexpected delays on costs.
Where must a contractor include the "Notice to Owner"? - In all home improvement
contracts over $500
