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CONTRACTORS LAW EXAM CA EXAM
2024 | 2 DIFFERENT EXAMS | 200
QUESTIONS AND CORRECT ANSWERS
(GRADED A+) | VERIFIED ANSWERS |
LATEST VERSIONS
CONTRACTORS LAW EXAM CA (FIRST EXAM)
Your accountant advises you to set up a cost management system. What does this system do? a. It gives a cost history to analyze labor and material costs. b. It shows where profits and losses are. c. It shows costs of materials only. d. It compares what others are charging for subcontracted work. ------ CORRECT ANSWER---------------a. It gives a cost history to analyze labor and material costs. An employee workd 60 hours in one week. If the hourly wage rate is $12, what are the gross wages? a. $ b. $ c. $ d. $1,080 ------CORRECT ANSWER---------------b. $ Gross wages = Regular Time + Overtime Regular Time = 40 hrs x $12/hr = $ Overtime = 20 hrs x 1.5 x $12/hr = $ Gross Wages = $480 + $360 = $ A(n) _____ represents a company's financial position on a specified date. a. balance sheet
b. income statement c. cash flow statement d. profit plan ------CORRECT ANSWER---------------a. balance sheet A(n) _____ summarizes revenues, costs 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---------------d. income statement An employer must furnish an employee with a completed IRS Form W- 2 (Wage and Tax Statement) by: a. January 1 b. January 31 c. April 15 d. the final day of employment ------CORRECT ANSWER---------------b. January 31 Which of the following financial ratios is the strictest measure of liquidity? a. quick ratio b. current ratio c. profitability ratio d. leverage ratio ------CORRECT ANSWER---------------a. quick ratio The Federal Employer Identification Number (EIN) is issued by the: a. Franchise Tax Board b. Board of Equalization c. Internal Revenue Services d. Employment Development Department ------CORRECT ANSWER--------- ------c. Internal Revenue Service
a. After $7,000, the FUTA rate increases. b. After $7,000, the FUTA rate decreases by 50%. c. After $7,000, the employer does not pay FUTA. d. Nothing. FUTA is not subject to a wage limit. ------CORRECT ANSWER-- -------------c. After $7,000, the employer does not pay FUTA. 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-- -------------d. workers' compensation insurance premiums To whom do you report and pay sales tax? a. County Tac Collector b. Internal Revenue Service c. Board of Equalization d. Franchise Tax Board ------CORRECT ANSWER---------------d. Board of Equalization How often are you required to pay sales tax? a. monthly b. quarterly c. annually d. It depends on the expected amount of sales tax. ------CORRECT ANSWER---------------b. quarterly When balancing the accounts receivable, which of the following would have no effect? a. Posting to the wrong accounts-receivable account. b. Crediting instead of debiting the accounts-receivable account. c. Debiting instead of crediting the accounts-receivable account.
d. Posting a receivable to an accounts-payable account. ------CORRECT ANSWER---------------a. posting to the wrong accounts-receivable account. What kind of discount do lumber yards and other suppliers offer to contractors who pay their bills promptly? a. 1/2% - 1% b. 1% - 2% c. 4% - 8% d. 10% - 12% ------CORRECT ANSWER---------------b. 1% - 2% If a newly hired employee does not have an SSN, what should be done? a. The employee must apply for an SSN. b. The employer must apply on behalf of the employee for an SSN. c. If a W-2 is provided, an SSN is not needed. d. Call the police. ------CORRECT ANSWER---------------a. The employee must apply for an SSN. Once a budget is finalized, the: a. contractor should stick to the budget no matter what happens b. contractor should do the best possible job of staying within the budget c. budget should be revised each month d. budget should be referred to only if the business has cash flow problems ------CORRECT ANSWER---------------b. contractor should do the best possible job of staying within the budget Which of the following procedures BEST ensures error-free bids? a. working with an attorney b. having another person draft the bid c. discussing details of the bid with the supplier d. rechecking the bid before submitting it to the client ------CORRECT ANSWER---------------d. rechecking the bid before submitting it to the client
After you have read the plans and specifications, what is the next important step in writing a bid? a. Talk to and select subs. b. Walk the job. c. Call about materials, price and availability. d. Talk to the crew leader about labor. ------CORRECT ANSWER--------------
- b. Walk the job. On a time and materials job, you should: a. not charge for profit and overhead b. add profit and overhead to labor only c. add profit and overhead to materials only d. add profit and overhead to labor and materials ------CORRECT ANSWER---------------d. add profit and overhead to labor and materials All of the following are causes for disciplinary action EXCEPT: a. allowing your license to be used by an unlicensed contractor b. entering into a contract with another contractor who is not licensed c. during bankruptcy, settling obligations incurred as a contractor for less than the full amount d. willful or deliberate failure to pay money when due for materials or service ------CORRECT ANSWER---------------c. during bankruptcy, settling obligations incurred as a contractor for less than the full amount is not cause for disciplinary action The qualifying RME for a construction firm must work at least: a. 32 hrs per wk or 80% of the work week b. 30 hrs per wk or 70% of the work week c. 24 hrs per wk or 65% of the work week d. 12 hrs per wk or 51% of the work week ------CORRECT ANSWER--------- ------a. 32 hrs per wk or 80% of the work week
If a contractor forgets to renew his or her license on time, the expire license may be renewed any time within _____ after its expiration without reapplying for a license and fulfilling the exam or waiver requirements. a. one year b. two years c. four years d. five years ------CORRECT ANSWER---------------d. five years When is an employee allowed to view their own personnel file? a. never b. when they have a court order c. whenever they wish d. during employee evaluations ------CORRECT ANSWER---------------c. when ever they wish As required by the immigration reform act, all employees hired on or after November 7, 1986 must complete Form ______ to verify their employment eligibility status. a. I- 9 b. W- 4 c. US- 99 d.N- 14 ------CORRECT ANSWER---------------a. I- 9 By law, a "hard laborer" may not be younger than _____ years old. a. 14 b. 15 c. 16 d. 17 ------CORRECT ANSWER---------------c. 16 years of age Ms. Gomez applies for a job. Of the following, the only reason an employer may lawfully deny her employment is: a. she is over 50 years of age
b. The down payment is limited to $1,000 or 10% of the total price, whichever is less. c. The contractor may require enough of a down payment to cover the total cost of materials, but not labor costs. d. Nothing. The contractor must wait until the work is completed to accept any payment. ------CORRECT ANSWER---------------b. The down payment is limited to $1,000 or 10% of the total price, whichever is less. When should you let an attorney see a construction contract? a. Before you let your client see the contract. b. After the contract is prepared, but before you sign it. c. After the building permit is obtained. d. After the contract is signed by you and your client. ------CORRECT ANSWER---------------b. After the contract is prepared, but before you sign it. If a sales presentation is made in Spanish, the home solicitation contract: a. must be in Spanish b. may be in English if the writing is plain and simple c. must be co-signed by an English-speaking person if the contract is in English d. must be translated into English and notarized ------CORRECT ANSWER- --------------a. must be in Spanish A contractor and a homeowner sign a home solicitation contract. If the owner lawfully cancels the contract, how long does the contractor have to pick up unused materials that were delivered to the owner's property? a. within 24 hours after cancellation b. within 10 days after cancellation c. within 20 days after cancellation d. It's too late. If the materials are delivered to the property before a notice of cancellation is received, the materials become the property of the owner. ------CORRECT ANSWER---------------c. within 20 days after cancellation
Of the following, which is best for determining the number of hours required for different phases of a project and for making sure the job is on schedule? a. bar graph and chart b. cash analysis chart c. review plans d. critical path method ------CORRECT ANSWER---------------d. critical path method Who is responsible for checking the site before the building inspector arrives? a. contractor b. owner c. foreperson d. architect ------CORRECT ANSWER---------------a. contractor Who would be held responsible if a contractor completes a project according to plans and later discovers that there is a building code violation? a. contractor b. architect c. both the contractor and the architect d. owner ------CORRECT ANSWER---------------c. both the contractor and the architect After a job is completed, the owner decides to have additional work done. How should the contractor proceed? a. Write a new contract and ask the owner to sign it. b. Make an oral agreement with the owner. c. Do the additional work for free. d. Get the owner to sign a change order. ------CORRECT ANSWER---------- -----a. Write a new contract and ask the owner to sign it.
Every employer of ______ or more full- or part-time employees must keep written health and safety records for _____ years. a. 1 ..... 3 b. 7 ..... 4 c. 10 .... 3 d. 11 .... 5 - -----CORRECT ANSWER---------------d. 11 .... 5 If required safety devices are missing from tools, what should an employee do? a. Notify the contractor, who is responsible for safety. b. Notify the property owner, who is responsible for safety. c. Safety devices are the employee's responsiblility. d. Call Cal/OSHA ------CORRECT ANSWER---------------a. notify the contractor, who is responsible for safety. Which would not have to be reported to DOSH immediately or withing 24 hours? a. death from a three-story fall b. drunken crane operator its 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 severe back injury ------ CORRECT ANSWER---------------c. car accident in which an employee steps onto a public road, gets hit by a car, and suffers a concussion When purchasing insurance, what is the best way to choose among different companies? a. referral b. cost and converage c. location of the company d. word-of-mouth ------CORRECT ANSWER---------------b. cost and coverage
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---------------c. 5 days 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 counter top. 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. ------ CORRECT ANSWER---------------a. Claim the damage on your general liability insurance policy. A contractor is looking for an insurance policy to cover a high degree of exposure to risk. Of the following, which policy would be best for this purpose? a. property b. general liability c. builder's risk d. umbrella ------CORRECT ANSWER---------------d. umbrella John Meyers, a general contractor, had a contract with Mr. and Mrs. Barnes to construct a gazebo and deck in their back yard. John was behind schedule and hired his 18-year-old son, Bart, to help on a part-time basis. After working on the project for a month, Bart slipped on a plank that John had laid across the deck but did not nail securely. As a result of the fall, Bart broke his leg. John is insured for workers' compensation, but Bart
Construction or alteration of any building, highway, excavation, or other structure in the State of California requires a contractor's license if the total cost of one or more contracts on the project is: a. $150 or more in labor only b. $200 or more in materials only c. $500 or more in labor and materials d. $500 or more in labor only ------CORRECT ANSWER---------------c. $ or more in labor and materials When should a contractor renew the contractor's license bond? a. the day it expires b. 10 days before it expires c. 30 days before it expires d. within 30 days after it expires ------CORRECT ANSWER---------------c. 30 days before it expires Harry and Linda have done business as a licensed partnership. If Linda is a general partner, but not the qualifier, what must she do to get an individual license? a. If Linda was listed as a partner on the liscense and was actively engaged in the business for at least five of the past seven years, she may apply for a license with a waiver of the exam. b. If Linda applies for an individual license, the partnership license must be inactivated. c. Linda is not entitled to apply for an individual license. d. General partners may automatically receive an individual license if the are listed on the partnership license. ------CORRECT ANSWER--------------- a. If Linda was listed as a partner on the license and was actively engaged in the business for at least five of the past seven years, she may apply for a license with a waiver of the exam. A subcontractor who does not serve a preliminary notice: a. may not sever a stop notice but may file a mechanic's lien
b. may not file a mechanic's lien but may serve a stop notice c. loses both stop notice and mechanic's lien rights d. loses nothing because subcontractors are not required to file preliminary notices ------CORRECT ANSWER---------------c. loses both stop notice and mechanic's lien rights When an owner signs a receipt for a stop notice, it usually means the owner: a. owes money to the contractor for labor and materials b. recognizes that work will stop in 30 days c. owes the sub money d. recognizes that a lien could be placed on funds ------CORRECT ANSWER---------------d. recognizes that a lien could be placed on funds What possible reason would an owner for requiring an unconditional lien release from a subcontractor? a. The lien release protects the prime contractor. b. A lien release informs the owner of progress on the job. c. A lien release provides for rights of cancellation. d. The owner's property covered by the release may not be liened. ------ CORRECT ANSWER---------------d. The owner's property covered by the release may not be liened. The CSLB has established a mandatory arbitration program of verified complaints in which the damages are: a. $1,000 or less b. $7,500 or less c. $7,500 or more d. $5,000 to $20,000 ------CORRECT ANSWER---------------b. $7,500 or less
The supplier of a potentially hazardous product must be able to provide a(n) ____ with that product. a. Material Safety Data Sheet b. Certificate for Use c. Injury Illness and Prevention Program d. Hazard Evaluation System Information Services bulletin ------CORRECT ANSWER---------------a. Material Safety Data Sheet Is it legal for a contractor to require employees to take lie detector tests? a. It is not legal for the contractor to require lie detector tests, but it would be legal for a federal, state, or local public agency to require lie detector tests of their employees. b. It is not legal for any employer to require lie detector tests. c. It is only legal for the contractor to require lie detector tests of employees who have criminal records. d. It is legal for the contractor to require lie detector tests, but it would not be legal for a federal, state, or local public agency to do so. ------CORRECT ANSWER---------------a. It is not legal for the contractor to require lie detector tests, but it would be legal for a federal, state, or local public agency to require lie detector tests of their employees. 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. ------CORRECT ANSWER---------------b. Review the plans and specifications with the owner.
Funds withheld to guarantee completion of a project and correction of defects are called a(n): a. remainder b. umbrage c. retention d. stipulation ------CORRECT ANSWER---------------c. retention Which of the following statements about home improvement laws is NOT correct? a. A subcontractor may give a salesperson a bonus. b. A general contractor may give a sales person a bonus. c. A subcontractor may not give the general contractor a bonus. d. The homeowner may give the salesperson a bonus. ------CORRECT ANSWER---------------d. The homeowner may give the salesperson a bonus. When you get an approved set of plans, what should you do first? a. Calculate the square footage. b. Call a material supplier. c. Schedule the job. d. Read any notes from the building department. ------CORRECT ANSWER---------------d. Read any notes from the building department. You are bidding as a prime contractor on a public works project. The work will not involve construction, improvement, or repair of streets, highways, or bridges. You will use subcontractors for part of the work. If you do not name a subcontractor for any part of the work; a. the contract is canceled b. you will do that part of the work yourself c. you may simply submit a name later d. the awarding authority will choose a subcontractor for you ------ CORRECT ANSWER---------------b. you will do that part of the work yourself
