Summary CSLB CONTRACTOR'S LAW and BUSINESS EXAM_ ANSWERED .
CSLB CONTRACTOR'S LAW & BUSINESS EXAM_ ANSWERED . _____, although usually the largest single item in a bid, can be fairly accurately determined. *Answer- Materials "Contractors are required by law to be licensed and regulated by the Contractors' State License Board. Any questions concerning a contractor may be referred to the Registrar, Contractors' State License Board, P.O. Box 26000, Sacramento, California, 95826." This statement must be on: *Answer- All prime contracts. A balance sheet shows: *Answer- A balance sheet shows assets and liabilities at a certain point in time. A client wants the house painted and carpet installed. What license classification(s) is/are required for this work? *Answer- Painting and decorating C-33 and floor covering C-15. A construction company was hiring a new crew and asked each prospective employee for their name, address, and Social Security number. Several prospective employees remembered their Social Security numbers but did not have a card or other documentation. The practice of relying on memorized Social Security numbers is: *Answer- Unacceptable: The actual Social Security card should have been inspected. 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 *Answer- A consumer may cancel a home solicitation contract at anytime prior to midnight of the 3rd business day after the date of the transaction. 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? *Answer- A bid bond would protect the client from a contractor who declines to take a job that has already bid. 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? *Answer- Yes a successor clause in a collective bargaining agreement is binding on a successor for up to three years. A contractor entered into a home improvement contract for more than $500 with Mrs. Swenson to remodel her kitchen and bathroom. The contract calls for a down payment before work is to begin. According to the Business and Professions Code, how much may the contractor accept from Mrs. Swenson as down payment for the work? *Answer- The down payment is limited to $1,000 or 10% of the total price, which ever is less. A contractor finds a 6" discrepancy on a set of plans. The contractor should: *Answer- Contact the architect or the building designer. A contractor has been turned in to DOSH by an employee for a safety violation. The contractor wants to find out who reported the violation and asked DOSH for the employee's name. What will DOSH likely do? *Answer- Unless requested otherwise, DOSH will keep confidential the name of any person making a complaint, and no retaliation may be directed at the employee if the employee's identity is discovered. 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. *Answer- It is not legal to ask prospective employees about arrest not leading to convictions. A contractor hires a subcontractor to demolish a concrete wall. Who is responsible for supplying safety goggles. *Answer- Subcontractor 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 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. A contractor meets Mr. Jones at his home to discuss remodeling. The contractor and Mr. Jones sign a contract that includes a three-day cancellation form. After the contractor leaves, Mr. Jones decides not to have the work done. Instead of using the cancellation form, Mr. Jones sends the contractor a letter by first-class mail stating that he is canceling the contract. Is Mr. Jones' cancellation effective? *Answer- Yes. Mr. Jones' letter does cancel the contract because it indicates his intention not to be bound by the contract. A contractor usually will not be held liable for a supplier going on strike, but if your supplier did go on strike what would you do? *Answer- Contact the owner immediately. A contractor, on his own initiative, changed the design of a building and carried out the change. The owner rejected the change and stated that the building has lost market value. If the owner takes the contractor to court and obtains a favorable judgment, the owner is: *Answer- Due the cost of repairs or the loss of market value. A contractor's license has expired. How long after the date of expiration does the contractor have to renew the license before it becomes void? *Answer- A contractor has five years after the date of expiration to renew the license before it becomes void. A general contractor has obtained bids from several subcontractors for a private project. He notices that one bid is substantially lower than the rest. Is it ethical and a good business practice for this contractor to inform the subcontractor that the bid is substantially lower than the bids of the other subcontractors? *Answer- Yes. If the contractor has reason to believe that the subcontractor has made an error in preparing his bid, the contractor should notify the subcontractor of the apparent error, but the contractor may not disclose the amounts of the other bids. A licensed contractor contracts with a building owner to do a $900 improvement. When applying for a building permit, the contractor checks the owner-builder box on the declaration form. Which of the following statements is correct? A.nThe contractor may check the box to avoid insurance charges. B. The contractor should check the box so that the owner-builder verification will be mailed to the owner. C. The contractor may check the box because the contractor is the owner's employee. D. The contractor may not check the owner-builder box because the owner contracted for the improvement. *Answer- The contractor may not check the owner-builder box because the owner contracted for the improvement. A mechanics' lien is a written document that must be signed and verified by the claimant. The first and third steps a contractor should take in filing a lien are listed below. Step 1: Obtain the exact legal description of the property. Step 2: Step 3: Find out if the person requesting the work of improvement is the owner. What is Step 2? *Answer- Find out the name of the legal owner of the property as well as the percent of ownership. A mechanics' lien. Step 1: Obtain the exact legal description of the property. Step 2: Find out the name of the legal owner of the property as well as the percent of ownership. Step 3: Find out if the person requesting the work of improvement is the owner. A notice canceling a home solicitation contract becomes effective when? *Answer- When the written notice is deposited in the mail. A notice of completion must be recorded within: *Answer- A notice of completion must be recorded within 10 days after work is completed. A prime contractor decides to sub out the electrical work. How would the prime determine what price to add for the electrical work? *Answer- The prime gets a firm bid from the subcontractor. 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. 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. A subcontractor must file a mechanics' lien with the: *Answer- A subcontractor must file a mechanics' lien with the county recorder. A subcontractor or material supplier has 30 days to file a lien once a notice of completion has been recorded. *Answer- A sub or material supplier has 30 days to file a lien once a notice of completion has been recorded. A subcontractor who does not serve a preliminary notice: A. May not serve a stop notice but may file a mechanics' lien. B. May not file a mechanics' lien but may serve a stop notice C. loses both stop and mechanics's lien rights D. Loses nothing because subcontractors are not required to serve preliminary notices. *Answer- A subcontractor that does not serve a preliminary notice loses both stop notice and mechanics' lien rights. A supplier who is furnishing a contractor with equipment or materials without any form of security other than the reputation of the contractor for paying debts when due has extended what type of credit? *Answer- This would be an open account type of credit. A(n) _____ represents a company's financial position on a specified date. A. Balance Sheet B. Income statement C. Cash flow statement D. Profit plan *Answer- A balance sheet. A(n) _____ summarizes revenues, cost of sales, and operating expenses over a period of time. A. Profit plan B. Balance sheet C. Cash flow statement D. Income statement *Answer- Income Statement AB 2040 requires that before work begins on a project, the contractor must inquire of the owner whether asbestos is present in any building constructed prior to: *Answer- A contractor must inquire on any building built before 1978 about asbestos. After a home improvement contract is signed, the contractor must substantially begin work within how many days of the date specified in the contract? *Answer- Within 20 days of the date specified in the contract. After a job is completed, the owner decides to have additional work done. How should the contractor proceed? *Answer- Write a new contract and ask the owner to sign it. After the building plans are approved, what is the next step? *Answer- The first step after a building plan is approved is to review the plans for errors and corrections. After you have read the plans and specifications, what is the next important step in writing a bid? A. Talk to and select subs. B. Walk the job. C. Call about materials, price, and availability. D. Talk to the crew leader about labor. *Answer- Walk the job. All of the following are causes for disciplinary action except: A. Allowing your license to be used by an unlined contractor. B. Entering into a contract with another contractor who is not licensed. C. During bankruptcy, setting obligations incurred as a contractor for less than the full amount owed. D. Willful or deliberate failure to pay money when due for materials or services. *Answer- During bankruptcy, settling obligations incurred as a contractor for less than the full amount owed. An active contractor's license is issued on January 18, 1995. On what date will the license expire? *Answer- January 31, 1997 An applicant for a contractor's license receives a notice from the Contractors' State License Board, dated October 1, that the applicant passed the written exams. To receive an active license, the applicant must file a license bond and fee no later than: *Answer- December 30th. You have 60 days to file a license bond. An employee whose regular rate is $10/hour works 60 hours one week and 30 hours the next. Based on a two-week payroll system, what are the gross wages due? *Answer- $1,000 dollars. An employee works 60 hours in one week. If the hourly wage rate is $12.00, what are the gross wages? *Answer- $840 40 hours at $12.00 20 hours at $18.00 An employer hires one part-time and two full-time employees. The full-time employees are covered by workers' compensation insurance, but not the part-time employee. Is this lawful? *Answer- No, even part time employees must be covered by workers compensation insurance. An employer must file federal Form 1099-MISC to report payments of _____ or more per calendar year to persons not treated as employees (e.g., independent contractors) for services performed for the business. *Answer- $600 An employer must furnish an employee with a completed IRS Form W-2 (Wage and Tax Statement) by: *Answer- The 31st of January. An employer remits State disability taxes withheld from an employees wages to what agency? *Answer- Employment Development Department An employer who receives a citation for a serious violation of Cal/OSHA regulations can be assessed a penalty of up to _____ for each violation. *Answer- Cal/OSHA can assess a penalty for a serious citation for up to $25,000 for each violation. An income statement shows: *Answer- An income statement shows revenues and expenses over an extended period of time. An owner is having a difficult time making progress payments on time. What should a contractor do to protect himself? *Answer- The contractor should ask the owner to open an escrow account. As a subcontractor on a public work of improvement, you complete your contract in a workmanlike manner. But the prime contractor, Mr. Adams, informs you that he cannot pay you. One of your best options is to file a stop notice, which has what effect? *Answer- On a public work of improvement, a stop notice would create a lien on the construction funds. 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. As part of the safety training process, contractors's supervisors are required to conduct "toolbox" or "tailgate" safety meetings. How often must these meetings be held. *Answer- At least once every ten working days. As required by the Immigration Reform and Control Act, all employees hired on or after November 7, 1986 must complete what form to verify their employment eligibility status? *Answer- I-9 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. before beginning work, an employer or contractor must inquire whether asbestos is present in any building constructed prior to: *Answer- 1978 Before you build on a landfill you must notify: *Answer- The government and the engineers. Bob Smith is the RME for the XYZ Construction Co., where he works all week. His own construction business, under a different name and license number, builds decks on weekends. Is this an acceptable practice for Bob? A. Yes: Bob may qualify as many licenses as he desires. B. Yes: Bob may qualify both licenses provided that he is regularly employed by XYZ and is actively involved in the operation of the business at least 32 hours per week or 80% of XYZ's total operating hours per week, whichever is less. C. No: Bob must take another qualifying exam to qualify a second license. D. No: Bob may qualify only XYZ Co.'s license in this case. *Answer- No Bob may qualify only XYZ Co.'s license in this case. 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 *Answer- Business records must be kept for 5 years. By law, a "hard laborer" may not be younger than ______ years old. *Answer- A hard laborer may not be younger than 16 years old. Construction or alteration of any building, highway, excavation, or other structure in the State of California requires a contractor's license if the total cost of one or more contracts on the project is: *Answer- $500 or more in labor and materials. 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. Direct costs are $37,000, overhead is 12% and profit is 5%. What is the selling price? *Answer- $44,578.31 Add the 12% overhead and 5% profit together, then subtract that from 100% (83%). Then divide the total direct cost ($37,000) by the remaining percentage (83%) = 445.7831. Disabled access laws went into effect in _____ for public buildings and in _____ for private buildings. *Answer- 1968 for public buildings and 1970 for private buildings. DOSH must investigate a complaint charging a serious violation of health or safety standards within: *Answer- DOSH must investigate a complaint charging a serious violation of health or safety standards within two working days. Every employer of ______ or more full or part time employees must keep written health and safety records for _______ years. A. 1-3 B. 7-4 C. 10-3 D. 11-5 *Answer- Every employer of 11 or more full or part time employees must keep written health and safety records for 5 years. 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. 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 #CONT.................
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cslb contractors law amp business
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cslb contractors law amp business exam answered 2022 2023
