CSLB CONTRACTOR'S LAW &
BUSINESS EXAM | 100% CORRECTLY
ANSWERED AND RATED A+ |
2025/2026 GUIDE
Some counties have an additional sales tax added to the base rate.
Which of the following is a correct statement regarding this additional
tax?
A. This additional tax does not apply to contractors.
B. You do not have to pay this additional tax if your home office is in
another county.
C. You may pay the additional tax charged in your county if the rate is
lower than the county where the materials were purchased.
D. You must pay the additional tax in the county where the materials
were purchased. - Correct Answer - You must pay the additional tax in
the county where the materials were purchased.
A notice of completion must be recorded within: - Correct 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 - Correct 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 - Correct Answer -
Workers compensation insurance premiums
Who pays FICA? - Correct 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? - Correct 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? - Correct 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 - Correct Answer - Income Statement
,If required safety devices are missing from tools, what should an
employee do? - Correct 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: - Correct 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: - Correct 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: - Correct 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. - Correct 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? - Correct 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: -
Correct 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? - Correct 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. - Correct 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? - Correct 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? - Correct Answer - 30 days of inactivity must pass before a
notice of cessation may be recorded.
BUSINESS EXAM | 100% CORRECTLY
ANSWERED AND RATED A+ |
2025/2026 GUIDE
Some counties have an additional sales tax added to the base rate.
Which of the following is a correct statement regarding this additional
tax?
A. This additional tax does not apply to contractors.
B. You do not have to pay this additional tax if your home office is in
another county.
C. You may pay the additional tax charged in your county if the rate is
lower than the county where the materials were purchased.
D. You must pay the additional tax in the county where the materials
were purchased. - Correct Answer - You must pay the additional tax in
the county where the materials were purchased.
A notice of completion must be recorded within: - Correct 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 - Correct 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 - Correct Answer -
Workers compensation insurance premiums
Who pays FICA? - Correct 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? - Correct 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? - Correct 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 - Correct Answer - Income Statement
,If required safety devices are missing from tools, what should an
employee do? - Correct 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: - Correct 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: - Correct 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: - Correct 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. - Correct 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? - Correct 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: -
Correct 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? - Correct 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. - Correct 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? - Correct 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? - Correct Answer - 30 days of inactivity must pass before a
notice of cessation may be recorded.
