CALIFORNIA STATE CONTRACTORS
LICENSE LAW AND BUSINESS EXAM 2026
WITH VERIFIED QUESTIONS AND ANSWERS
A consolidated cash flow budget is usually prepared for what period of time? -
ANSWER-1 year
Where would you list amounts you still owe? - ANSWER-Accounts Payable
Where would you list amounts due to you? - ANSWER-Accounts Receivable
Name given to annual accounting period starting January 1st. - ANSWER-
Calendar Year
What is the annual accounting period starting when a company chooses? -
ANSWER-Fiscal Year
Accounting style that makes entries ONLY when cash changes hands. -
ANSWER-Cash Basis Accounting
Accounting style that makes entries regardless of whether or not cash has
actually changed hands - ANSWER-Accrual Accounting
Is accounting and bookkeeping the same thing? - ANSWER-No. Bookkeeping
is the recording of financial information.
,What are some examples of variable costs or expenses - ANSWER-Utilities,
office supplies, materials
If your business changes from sole ownership to a partnership or vice versa, the
employment taxes should be filed as ___ _____ for that entire year. -
ANSWER-one business
What shows income and expenses over a period of time? - ANSWER-Income
statement
What shows total assets and total liabilities on a specific date? - ANSWER-
Balance Sheet
What is the Equity equation? - ANSWER-Equity = Assets - Liabilities
What must you obtain before you can begin to hire employees? - ANSWER-
E.I.N., Employment Identification Number
Who requires and enforces the E.I.N? - ANSWER-The I.R.S.
You must keep records of employment taxes for how many years? - ANSWER-
4 years
After you have an employee, or have paid $100 in total wages to one or more
employees; who must you register with? - ANSWER-The E.D.D., Employment
Development Department
What are the three types of Federal withholding taxes? - ANSWER-W4, Federal
Income Tax, W2, Federal Wage and Tax Statement, and ,I9, Employee
Eligibility Verification
, What State Taxes are withheld in California? - ANSWER-California State Tax,
Disability, Unemployment, and Employment Training taxes.
What is the maximum number of days an employee is allowed to work? -
ANSWER-6 out of 7
Who pays Federal Unemployment Taxes, or FUTA. - ANSWER-The employer
Who pays State Unemployment Taxes, or U.I. - ANSWER-The employer
Who pays Employment Training Taxes, or E.T.T. - ANSWER-The employer
Who pays Federal and State Income Taxes - ANSWER-The employee
Who pays for state disability insurance? - ANSWER-The employee
The basic hourly rate paid on public works jobs to a majority of workers
engaged in a particular craft. - ANSWER-Prevailing wages
Program responsible for enforcing California laws and regulations for
workplace safety. - ANSWER-Cal OSHA
Program that protects workers and the public from safety hazards. - ANSWER-
California Division of Occupational Health, DOSH
What must employers establish, implement and maintain in the workplace to
establish a safe and healthy place to work. - ANSWER-I.I.P.P., Injury and
Illness Prevention Program
Where is it required for you to call to report a work related injury or fatality. -
ANSWER-OSHA
LICENSE LAW AND BUSINESS EXAM 2026
WITH VERIFIED QUESTIONS AND ANSWERS
A consolidated cash flow budget is usually prepared for what period of time? -
ANSWER-1 year
Where would you list amounts you still owe? - ANSWER-Accounts Payable
Where would you list amounts due to you? - ANSWER-Accounts Receivable
Name given to annual accounting period starting January 1st. - ANSWER-
Calendar Year
What is the annual accounting period starting when a company chooses? -
ANSWER-Fiscal Year
Accounting style that makes entries ONLY when cash changes hands. -
ANSWER-Cash Basis Accounting
Accounting style that makes entries regardless of whether or not cash has
actually changed hands - ANSWER-Accrual Accounting
Is accounting and bookkeeping the same thing? - ANSWER-No. Bookkeeping
is the recording of financial information.
,What are some examples of variable costs or expenses - ANSWER-Utilities,
office supplies, materials
If your business changes from sole ownership to a partnership or vice versa, the
employment taxes should be filed as ___ _____ for that entire year. -
ANSWER-one business
What shows income and expenses over a period of time? - ANSWER-Income
statement
What shows total assets and total liabilities on a specific date? - ANSWER-
Balance Sheet
What is the Equity equation? - ANSWER-Equity = Assets - Liabilities
What must you obtain before you can begin to hire employees? - ANSWER-
E.I.N., Employment Identification Number
Who requires and enforces the E.I.N? - ANSWER-The I.R.S.
You must keep records of employment taxes for how many years? - ANSWER-
4 years
After you have an employee, or have paid $100 in total wages to one or more
employees; who must you register with? - ANSWER-The E.D.D., Employment
Development Department
What are the three types of Federal withholding taxes? - ANSWER-W4, Federal
Income Tax, W2, Federal Wage and Tax Statement, and ,I9, Employee
Eligibility Verification
, What State Taxes are withheld in California? - ANSWER-California State Tax,
Disability, Unemployment, and Employment Training taxes.
What is the maximum number of days an employee is allowed to work? -
ANSWER-6 out of 7
Who pays Federal Unemployment Taxes, or FUTA. - ANSWER-The employer
Who pays State Unemployment Taxes, or U.I. - ANSWER-The employer
Who pays Employment Training Taxes, or E.T.T. - ANSWER-The employer
Who pays Federal and State Income Taxes - ANSWER-The employee
Who pays for state disability insurance? - ANSWER-The employee
The basic hourly rate paid on public works jobs to a majority of workers
engaged in a particular craft. - ANSWER-Prevailing wages
Program responsible for enforcing California laws and regulations for
workplace safety. - ANSWER-Cal OSHA
Program that protects workers and the public from safety hazards. - ANSWER-
California Division of Occupational Health, DOSH
What must employers establish, implement and maintain in the workplace to
establish a safe and healthy place to work. - ANSWER-I.I.P.P., Injury and
Illness Prevention Program
Where is it required for you to call to report a work related injury or fatality. -
ANSWER-OSHA
