CSLB CONTRACTORS LAW AND BUSINESS EXAM ACTUAL
EXAM QUESTIONS AND CORRECT ANSWERS (100%
VERIFIED CORRECT ANSWERS READY)
What is the purpose of the mechanic's lien? - It encumber the owners property as
security until the bill is paid
What info is needed on a time card according to the fair labor standard act? - Social
security
Who is required to conduct safety/tailgate meetings? - Supervisors are required every
10 days
In a construction business, who is responsible for training new employees - The
contractor
How much time do contractors have to record mechanics lien after a notice of
completion has been recorded - 30 days.
Prime contractors will have 60
What is the purpose of notice to owner? - To inform the home owner of the contractors
lien rights
If the contractor obtains his contractors license on April 7, 2010 when will the license
need to be renewed? - April 30 2012
Contract expires 2 years at the end of the month
Where would depressiation appear on the balance sheet> - Fixed assets.
Only fixed assets can be depreciated
Homeowners have how many days from the date of completion to file a notice of
completion - 15
On public projects, the contractor must pay his employees at what rate? - Regular pay
What are fixed costs in the construction business - Rent, Managers salary
What does the ceiling limit mean in tax - Max tax that can be imposed
How much time does a contractor have to renew his license after the expiration date
without retaking the exam? - 5 year
When you collect sales tax from your customer for goods, which agency do you report
and pay sales tax collected? - State board of equalization
, Sales tax is a state tax. State income taxes are payable to the franchise tax board. IRS
only collects federal taxes
How long is the contractor liable for patent or visible defects? - 4 years
How long is the contractorr liable for latent or structural defects - Latent is an invisible or
structural defect liable for up to 10 years
Accounts receivable contains - Retention
Retention usually 10%; it is withheld by the owner from the contract to ensure that the
job is done properly and subcontractors are paid.
What is considered a fixed cost to a contractor? - Office rent
What is considered a variable cost to contractors? - Construction material
If a home solicitation presentation is made in spanish, the contract language must be -
spanish
If the employer requires a pre-employement physical exam, who must pay for the
exam? - Employer
How often should a contractor renew his license? - 2 years
Licenses become void after 5
What is the overtime pay rate after 8hrs of work - 1.5.
after 12, rate doubles
What should be included in the change order form - Reason for change
What is the benefit of arbitration over legislation - Arbitration is cheaper
When the total price of the bid is over____ the contractor must be licensed - $500
Where does a contractor/employer obtain a Federal Employer Identifacation Number -
IRS
In small claims court - You cannot be presented by an attorney.
If the claim is appealed, you can have an attorney
Who publishes the material safety data sheet? - Manufacturer
The notice of cessation is filed - after labor has ceased for 30 days
What is the max value of a gift which the home improvement sales person can give to a
potential customer? - $5
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