CSLB CONTRACTOR'S LAW & BUSINESS| LATEST VERSION UPDATED| 200+ FINAL EXAM
QUESTIONS AND CORRECT ANSWERS| 100% CORRECT| GRADED A+| ASSURED 100% PASS
An employer remits State disability taxes withheld from an employees wages to what agency? -
✔ANSWER Employment Development Department
Which act establishes the rights of workers to organize into unions and negotiate contracts? - ✔ANSWER
National Labor Relations Act of 1935
Who must sign a joint control addendum to a home improvement contract? - ✔ANSWER Owner,
contractor, and joint control officer.
When purchasing insurance, what is the best way to chose among different companies? - ✔ANSWER
Cost and Coverage
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. -
✔ANSWER Review the plans and specifications with the owner.
When an owner signs a receipt for a stop notice, it usually means the owner: - ✔ANSWER The owner
recognizes that a lien could be placed on funds.
To whom do you report and pay sales tax? - ✔ANSWER The Board of Equalization
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.
,By law, a "hard laborer" may not be younger than ______ years old. - ✔ANSWER A hard laborer may
not be younger than 16 years old.
When is the last day a customer can cancel a contract that was signed on Friday, December 21st? -
✔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.
When a notice of completion has been filed, the original contractor has how many days to record a lien. -
✔ANSWER 60 days to record a lien.
Which of the following financial ratios is the strictest measure of liquidity?
A. Quick Ratio
B. Current Ratio
C. Profitability Ratio
D. Leverage Ratio - ✔ANSWER The quick ratio is the strictest measure of liquidity.
When should you let your attorney see a construction contract? - ✔ANSWER After the contract is
prepared but before it is signed.
How often are FICA taxes reported and paid? - ✔ANSWER Quarterly
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.
Funds withheld to guarantee completion of a project and correction of defects are called a(n): -
✔ANSWER Retention
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.
Why would a contractor have a case in Superior Court? - ✔ANSWER If it is a dispute of more than
$25,000 it can be transferred to Superior Court.
Which would not have to be reported to DOSH immediately or within 24 hours?
A. Death from a three-story fall.
B. Drunken crane operator hits a high-voltage power line
C. Car accident in which an employee steps onto a public road, gets hit by a car, and suffers a concussion.
D. Employee falls off forklift and suffers a sever back injury. - ✔ANSWER Car accident in which an
employee steps onto a public road, gets hit by a car, and suffers a concussion.
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.
An employer must furnish an employee with a completed IRS Form W-2 (Wage and Tax Statement) by: -
✔ANSWER The 31st of January.
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.
The purpose of a 20-day preliminary notice for private work is to? - ✔ANSWER Notify the owner that
the person or firm who sent the notice has improved the property.
Is it legal for a contractor to pay employees in cash? - ✔ANSWER Yes, if the contractor provides each
employee with a wage deduction statement semimonthly or at the time of each wage payment.
You are bidding on a job with plans drawn by the owner. You notice a code violation and bring it to the
attention of the owner. The owner declines to remedy the code violation and tells you not to worry.
What should you do? - ✔ANSWER Decline to bid the work.
On a time-and-materials job, you should: - ✔ANSWER Add profit and overhead to labor and
materials
Your employee sets a cabinet wrong. The cabinet falls from the wall and damages the client's counter
top. What should you do?
A. Claim the damage on your general liability insurance policy.
B. Require the employee to pay for the damage to the countertop.
C. Tell the client to claim the damaged counter top on his or her homeowner's insurance policy.
D. No action is required: The client must assume the risk of damage. - ✔ANSWER Claim the damage
on your general liability insurance policy.
QUESTIONS AND CORRECT ANSWERS| 100% CORRECT| GRADED A+| ASSURED 100% PASS
An employer remits State disability taxes withheld from an employees wages to what agency? -
✔ANSWER Employment Development Department
Which act establishes the rights of workers to organize into unions and negotiate contracts? - ✔ANSWER
National Labor Relations Act of 1935
Who must sign a joint control addendum to a home improvement contract? - ✔ANSWER Owner,
contractor, and joint control officer.
When purchasing insurance, what is the best way to chose among different companies? - ✔ANSWER
Cost and Coverage
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. -
✔ANSWER Review the plans and specifications with the owner.
When an owner signs a receipt for a stop notice, it usually means the owner: - ✔ANSWER The owner
recognizes that a lien could be placed on funds.
To whom do you report and pay sales tax? - ✔ANSWER The Board of Equalization
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.
,By law, a "hard laborer" may not be younger than ______ years old. - ✔ANSWER A hard laborer may
not be younger than 16 years old.
When is the last day a customer can cancel a contract that was signed on Friday, December 21st? -
✔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.
When a notice of completion has been filed, the original contractor has how many days to record a lien. -
✔ANSWER 60 days to record a lien.
Which of the following financial ratios is the strictest measure of liquidity?
A. Quick Ratio
B. Current Ratio
C. Profitability Ratio
D. Leverage Ratio - ✔ANSWER The quick ratio is the strictest measure of liquidity.
When should you let your attorney see a construction contract? - ✔ANSWER After the contract is
prepared but before it is signed.
How often are FICA taxes reported and paid? - ✔ANSWER Quarterly
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.
Funds withheld to guarantee completion of a project and correction of defects are called a(n): -
✔ANSWER Retention
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.
Why would a contractor have a case in Superior Court? - ✔ANSWER If it is a dispute of more than
$25,000 it can be transferred to Superior Court.
Which would not have to be reported to DOSH immediately or within 24 hours?
A. Death from a three-story fall.
B. Drunken crane operator hits a high-voltage power line
C. Car accident in which an employee steps onto a public road, gets hit by a car, and suffers a concussion.
D. Employee falls off forklift and suffers a sever back injury. - ✔ANSWER Car accident in which an
employee steps onto a public road, gets hit by a car, and suffers a concussion.
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.
An employer must furnish an employee with a completed IRS Form W-2 (Wage and Tax Statement) by: -
✔ANSWER The 31st of January.
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.
The purpose of a 20-day preliminary notice for private work is to? - ✔ANSWER Notify the owner that
the person or firm who sent the notice has improved the property.
Is it legal for a contractor to pay employees in cash? - ✔ANSWER Yes, if the contractor provides each
employee with a wage deduction statement semimonthly or at the time of each wage payment.
You are bidding on a job with plans drawn by the owner. You notice a code violation and bring it to the
attention of the owner. The owner declines to remedy the code violation and tells you not to worry.
What should you do? - ✔ANSWER Decline to bid the work.
On a time-and-materials job, you should: - ✔ANSWER Add profit and overhead to labor and
materials
Your employee sets a cabinet wrong. The cabinet falls from the wall and damages the client's counter
top. What should you do?
A. Claim the damage on your general liability insurance policy.
B. Require the employee to pay for the damage to the countertop.
C. Tell the client to claim the damaged counter top on his or her homeowner's insurance policy.
D. No action is required: The client must assume the risk of damage. - ✔ANSWER Claim the damage
on your general liability insurance policy.
