CA CONTRACTORS LICENSE TEST QUESTIONS BUSINESS AND LAW QUESTIONS WITH 100- CORRECT ANSWERS

CA CONTRACTORS LICENSE TEST QUESTIONS
BUSINESS AND LAW 2026-2027 QUESTIONS WITH
100% CORRECT ANSWERS

How much time does a contractor have to renew his license after the expiration date without retaking th
e exam? - correct answer-5 year



When you collect sales tax from your customer for goods, which agency do you reportPand pay sales tax
collected? - correct answer-State board of equalization

Sales tax is a state tax. State income taxes are payable to the franchise tax board. IRS only collects federa
l taxes



How longPis the contractor liable for patent or visible defects? - correct answer-4 years



How longPis the contractorr liable for latent or structural defects - correct answer-
Latent is an invisible or structural defect liable for up to 10Pyears



Accounts receivable contains - correct answer-Retention

Retention usually 10%; it is withheld by the owner from the contract to ensure that the job is done prop
erly and subcontractors are paid.



What is considered a fixed costPto a contractor? - correct answer-Office rent



What is considered a variable cost to contractors? - correct answer-Construction material



If a home solicitation presentation is made in spanish, the contract language mustPbe - correct answer-
spanish



If the employer requires a pre-employement physical exam, who must pay for the exam? -
correct answer-Employer

, How often should a contractor renew his license? - correct answer-
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2 years Licenses become void after 5
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What is the overtime pay rate after 8hrs of work - correct answer-
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1.5. after 12, rate doubles
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What should be included in the change order form - correct answer-Reason for change
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What is the benefit of arbitration over legislation - correct answer-Arbitration is cheaper
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When the total price of the bid is over_____ the contractor must be licensed - correct answer-$500
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Where does a contractor/employer obtain a Federal Employer Identifacation Number - correct answer- IRS
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In small claims court -Pcorrect answer-
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You cannot be presented by an attorney. If the claim is appealed, you can have a
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n attorney
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Who publishes the material safety data sheet? - correct answer-Manufacturer
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The notice of cessation is filed - correct answer-after labor has ceased for 30 days
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What is the max value of a gift which the home improvement sales person can give to a potential custo me
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r? - correct answer-$5
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Which employees are not covered by DOSH or Cal/Osha? - correct answer-Federal employees.
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DOSH isPa state agency that can only cover state employees, county employees and private employees. Fe
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deral employees are covered by OSHA
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