CSLB CONTRACTOR'S LAW & BUSINESS EXAM
COMPREHENSIVE QUESTIONS AND VERIFIED
ACCURATE SOLUTION |GET IT 100% ACCURATE!!
A notice of completion must be recorded within: - ANSWER-A notice of completion must be recorded
within 10 days after work is completed.
Insured employers must report every work-related illness or injury to their workers' compensation
carrier within _____ of the incident.
A. 24 hours
B. 2 days
C. 5 days
D. 10 days - ANSWER-Any work related illness or injury must be reported to the workers compensation
insurance company within 5 days.
Which of the following may NOT be deducted from an employee's paycheck?
A. SDI
B. FICA
C. Medicare Tax
D. Workers' compensation insurance premiums - ANSWER-Workers compensation insurance premiums
Who pays FICA? - ANSWER-For FICA, it is 50% the employer and 50% the employee.
If, during excavation, you unearth human remains or burial artifacts at a construction site, what should
you do? - ANSWER-Stop work immediately at that site and any there nearby area that may have
remains.
Who would be held responsible if a contractor completes a project according to plans and later
discovers that there is a building code violation? - ANSWER-Both the contractor and the architect would
be liable.
,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
If required safety devices are missing from tools, what should an employee do? - ANSWER-Notify the
contractor, who is responsible for safety.
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.
The required Injury and Illness Prevention Program (IIPP) takes the form of: - ANSWER-The IIPP Injury
and Illness Prevention Program takes the form of a written plan that includes procedures and that is put
into practice and documented.
Social security tax for a self-employed contractor is: - ANSWER-Based on the rate set for the self-
employed for the year in which the tax is paid.
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?
COMPREHENSIVE QUESTIONS AND VERIFIED
ACCURATE SOLUTION |GET IT 100% ACCURATE!!
A notice of completion must be recorded within: - ANSWER-A notice of completion must be recorded
within 10 days after work is completed.
Insured employers must report every work-related illness or injury to their workers' compensation
carrier within _____ of the incident.
A. 24 hours
B. 2 days
C. 5 days
D. 10 days - ANSWER-Any work related illness or injury must be reported to the workers compensation
insurance company within 5 days.
Which of the following may NOT be deducted from an employee's paycheck?
A. SDI
B. FICA
C. Medicare Tax
D. Workers' compensation insurance premiums - ANSWER-Workers compensation insurance premiums
Who pays FICA? - ANSWER-For FICA, it is 50% the employer and 50% the employee.
If, during excavation, you unearth human remains or burial artifacts at a construction site, what should
you do? - ANSWER-Stop work immediately at that site and any there nearby area that may have
remains.
Who would be held responsible if a contractor completes a project according to plans and later
discovers that there is a building code violation? - ANSWER-Both the contractor and the architect would
be liable.
,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
If required safety devices are missing from tools, what should an employee do? - ANSWER-Notify the
contractor, who is responsible for safety.
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.
The required Injury and Illness Prevention Program (IIPP) takes the form of: - ANSWER-The IIPP Injury
and Illness Prevention Program takes the form of a written plan that includes procedures and that is put
into practice and documented.
Social security tax for a self-employed contractor is: - ANSWER-Based on the rate set for the self-
employed for the year in which the tax is paid.
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?
