Page 1 of 50
CSLB CONTRACTOR'S LAW & BUSINESS EXAM TEST
WITH COMPLETE 250 QUESTIONS AND CORRECT
AND SOLUTIONS JUST RELEA SED THIS YEAR
Question: Sometimes contracts can prove to be too vague to interpret without disagreement
between owner and contractor. Which of the following steps would best prevent such
problems?
A. Walk the job site with the owner.
B. Review the plans and specifications with the owner.
C. Show the owner the critical path schedule.
D. Include a payment schedule in the contract and review other details of the contract with the
owner. - CORRECT ANSWER✔✔Review the plans and specifications with the owner.
Question: When an owner signs a receipt for a stop notice, it usually means the owner: -
CORRECT ANSWER✔✔The owner recognizes that a lien could be placed on funds.
Question: To whom do you report and pay sales tax? - CORRECT ANSWER✔✔The Board of
Equalization
, Page 2 of 50
Question: DOSH must investigate a complaint charging a serious violation of health or safety
standards within: - CORRECT ANSWER✔✔DOSH must investigate a complaint charging a serious
violation of health or safety standards within two working days.
Question: By law, a "hard laborer" may not be younger than ______ years old. - CORRECT
ANSWER✔✔A hard laborer may not be younger than 16 years old.
Question: When is the last day a customer can cancel a contract that was signed on Friday,
December 21st? - CORRECT ANSWER✔✔The following Wednesday.
The customer has the right to cancel 3 business days after the day the contract has been signed
and delivered to the. In this case: Saturday Midnight day one. Monday midnight day two
Wednesday Midnight day three. NOTE: Sunday and Tuesday were not business days since
Tuesday was a holiday. Correct answer is Wednesday midnight.
Question: When a notice of completion has been filed, the original contractor has how many
days to record a lien. - CORRECT ANSWER✔✔60 days to record a lien.
Question: Which of the following financial ratios is the strictest measure of liquidity?
A. Quick Ratio
B. Current Ratio
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C. Profitability Ratio
D. Leverage Ratio - CORRECT ANSWER✔✔The quick ratio is the strictest measure of liquidity.
Question: When should you let your attorney see a construction contract? - CORRECT
ANSWER✔✔After the contract is prepared but before it is signed.
Question: How often are FICA taxes reported and paid? - CORRECT ANSWER✔✔Quarterly
Question: Business records must be kept and made available for inspection by the Registrar of
Contractors for a period of _____ after completion of a construction project or operation.
A. One year
B. Two years
C. Three years
D. Five years - CORRECT ANSWER✔✔Business records must be kept for 5 years.
Question: Funds withheld to guarantee completion of a project and correction of defects are
called a(n): - CORRECT ANSWER✔✔Retention
, Page 4 of 50
Question: An employer remits State disability taxes withheld from an employees wages to what
agency? - CORRECT ANSWER✔✔Employment Development Department
Question: Which act establishes the rights of workers to organize into unions and negotiate
contracts? - CORRECT ANSWER✔✔National Labor Relations Act of 1935
Question: A contractor has had a problem with employees stealing tools and equipment from
job sites. When conducting job interviews, may the contractor ask prospective employees about
their arrest records?
A. It is legal to ask prospective employees about arrests not leading to convictions.
B. It is not legal to ask prospective employees about arrests not leading to convictions.
C. It is legal for a private employer to ask about arrests not leading to convictions, but it would
not be legal for city or county agencies to ask about such arrests.
D. It is legal for a private employer to ask about arrests leading to convictions, but it would not
be legal for a federal, state, or local public agency to do so. - CORRECT ANSWER✔✔It is not legal
to ask prospective employees about arrest not leading to convictions.
CSLB CONTRACTOR'S LAW & BUSINESS EXAM TEST
WITH COMPLETE 250 QUESTIONS AND CORRECT
AND SOLUTIONS JUST RELEA SED THIS YEAR
Question: Sometimes contracts can prove to be too vague to interpret without disagreement
between owner and contractor. Which of the following steps would best prevent such
problems?
A. Walk the job site with the owner.
B. Review the plans and specifications with the owner.
C. Show the owner the critical path schedule.
D. Include a payment schedule in the contract and review other details of the contract with the
owner. - CORRECT ANSWER✔✔Review the plans and specifications with the owner.
Question: When an owner signs a receipt for a stop notice, it usually means the owner: -
CORRECT ANSWER✔✔The owner recognizes that a lien could be placed on funds.
Question: To whom do you report and pay sales tax? - CORRECT ANSWER✔✔The Board of
Equalization
, Page 2 of 50
Question: DOSH must investigate a complaint charging a serious violation of health or safety
standards within: - CORRECT ANSWER✔✔DOSH must investigate a complaint charging a serious
violation of health or safety standards within two working days.
Question: By law, a "hard laborer" may not be younger than ______ years old. - CORRECT
ANSWER✔✔A hard laborer may not be younger than 16 years old.
Question: When is the last day a customer can cancel a contract that was signed on Friday,
December 21st? - CORRECT ANSWER✔✔The following Wednesday.
The customer has the right to cancel 3 business days after the day the contract has been signed
and delivered to the. In this case: Saturday Midnight day one. Monday midnight day two
Wednesday Midnight day three. NOTE: Sunday and Tuesday were not business days since
Tuesday was a holiday. Correct answer is Wednesday midnight.
Question: When a notice of completion has been filed, the original contractor has how many
days to record a lien. - CORRECT ANSWER✔✔60 days to record a lien.
Question: Which of the following financial ratios is the strictest measure of liquidity?
A. Quick Ratio
B. Current Ratio
, Page 3 of 50
C. Profitability Ratio
D. Leverage Ratio - CORRECT ANSWER✔✔The quick ratio is the strictest measure of liquidity.
Question: When should you let your attorney see a construction contract? - CORRECT
ANSWER✔✔After the contract is prepared but before it is signed.
Question: How often are FICA taxes reported and paid? - CORRECT ANSWER✔✔Quarterly
Question: Business records must be kept and made available for inspection by the Registrar of
Contractors for a period of _____ after completion of a construction project or operation.
A. One year
B. Two years
C. Three years
D. Five years - CORRECT ANSWER✔✔Business records must be kept for 5 years.
Question: Funds withheld to guarantee completion of a project and correction of defects are
called a(n): - CORRECT ANSWER✔✔Retention
, Page 4 of 50
Question: An employer remits State disability taxes withheld from an employees wages to what
agency? - CORRECT ANSWER✔✔Employment Development Department
Question: Which act establishes the rights of workers to organize into unions and negotiate
contracts? - CORRECT ANSWER✔✔National Labor Relations Act of 1935
Question: A contractor has had a problem with employees stealing tools and equipment from
job sites. When conducting job interviews, may the contractor ask prospective employees about
their arrest records?
A. It is legal to ask prospective employees about arrests not leading to convictions.
B. It is not legal to ask prospective employees about arrests not leading to convictions.
C. It is legal for a private employer to ask about arrests not leading to convictions, but it would
not be legal for city or county agencies to ask about such arrests.
D. It is legal for a private employer to ask about arrests leading to convictions, but it would not
be legal for a federal, state, or local public agency to do so. - CORRECT ANSWER✔✔It is not legal
to ask prospective employees about arrest not leading to convictions.
