CSLB CONTRACTOR'S LAW &
BUSINESS EXAM 200 QUESTIONS AND
ANSWERS 100% VERIFIED ALREADY
GRADED A+ NEWEST VERSION
"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=> Every employer of 11 or more full or part time employees must
keep written health and safety records for 5 years."
"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=> Walk the job."
"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.
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,D. Budget should be referred to only if the business has cashflow problems. - CORRECT
ANSWER=> The contractor should do the best possible job of staying within budget. `"
"Who must sign a joint control addendum to a home improvement contract? - CORRECT
ANSWER=> Owner, contractor, and joint control officer."
"When purchasing insurance, what is the best way to chose among different companies? -
CORRECT ANSWER=> Cost and Coverage"
"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=> Review the plans and specifications with the owner."
"When an owner signs a receipt for a stop notice, it usually means the owner: - CORRECT
ANSWER=> The owner recognizes that a lien could be placed on funds."
"To whom do you report and pay sales tax? - CORRECT ANSWER=> The Board of Equalization"
"DOSH must investigate a complaint charging a serious violation of health or safety standards
within: - CORRECT ANSWER=> DOSH must investigate a complaint charging a serious violation of
health or safety standards within two working days."
"By law, a "hard laborer" may not be younger than years old. - CORRECT ANSWER=> A
hard laborer may not be younger than 16 years old."
"When is the last day a customer can cancel a contract that was signed on Friday, December
21st? - CORRECT ANSWER=> The following Wednesday.
The customer has the right to cancel 3 business days after the day the contract has been signed
and delivered to the. In this case: Saturday Midnight day one. Monday midnight day two
Wednesday Midnight day three. NOTE: Sunday and Tuesday were not business days since
Tuesday was a holiday. Correct answer is Wednesday midnight."
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, "When a notice of completion has been filed, the original contractor has how many days to
record a lien. - CORRECT ANSWER=> 60 days to record a lien."
"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=> The quick ratio is the strictest measure of liquidity."
"When should you let your attorney see a construction contract? - CORRECT ANSWER=> After the
contract is prepared but before it is signed."
"How often are FICA taxes reported and paid? - CORRECT ANSWER=> Quarterly"
"Business records must be kept and made available for inspection by the Registrar of
Contractors for a period of after completion of a construction project or operation.
A. One year
B. Two years
C. Three years
D. Five years - CORRECT ANSWER=> Business records must be kept for 5 years."
"Funds withheld to guarantee completion of a project and correction of defects are called a(n): -
CORRECT ANSWER=> Retention"
"Direct costs are $37,000, overhead is 12% and profit is 5%. What is the selling price? - CORRECT
ANSWER=> $44,578.31
Add the 12% overhead and 5% profit together, then subtract that from 100% (83%). Then divide
the total direct cost ($37,000) by the remaining percentage (83%) = 445.7831."
"A mechanics' lien is a written document that must be signed and verified by the claimant. The
first and third steps a contractor should take in filing a lien are listed below. Step 1: Obtain the
exact legal description of the property. Step 2: Step 3: Find out if the person requesting the
work of improvement is the owner. What is Step 2? - CORRECT ANSWER=> Find out the name of
the legal owner of the property as well as the percent of ownership.
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BUSINESS EXAM 200 QUESTIONS AND
ANSWERS 100% VERIFIED ALREADY
GRADED A+ NEWEST VERSION
"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=> Every employer of 11 or more full or part time employees must
keep written health and safety records for 5 years."
"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=> Walk the job."
"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.
1|Page
,D. Budget should be referred to only if the business has cashflow problems. - CORRECT
ANSWER=> The contractor should do the best possible job of staying within budget. `"
"Who must sign a joint control addendum to a home improvement contract? - CORRECT
ANSWER=> Owner, contractor, and joint control officer."
"When purchasing insurance, what is the best way to chose among different companies? -
CORRECT ANSWER=> Cost and Coverage"
"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=> Review the plans and specifications with the owner."
"When an owner signs a receipt for a stop notice, it usually means the owner: - CORRECT
ANSWER=> The owner recognizes that a lien could be placed on funds."
"To whom do you report and pay sales tax? - CORRECT ANSWER=> The Board of Equalization"
"DOSH must investigate a complaint charging a serious violation of health or safety standards
within: - CORRECT ANSWER=> DOSH must investigate a complaint charging a serious violation of
health or safety standards within two working days."
"By law, a "hard laborer" may not be younger than years old. - CORRECT ANSWER=> A
hard laborer may not be younger than 16 years old."
"When is the last day a customer can cancel a contract that was signed on Friday, December
21st? - CORRECT ANSWER=> The following Wednesday.
The customer has the right to cancel 3 business days after the day the contract has been signed
and delivered to the. In this case: Saturday Midnight day one. Monday midnight day two
Wednesday Midnight day three. NOTE: Sunday and Tuesday were not business days since
Tuesday was a holiday. Correct answer is Wednesday midnight."
2|Page
, "When a notice of completion has been filed, the original contractor has how many days to
record a lien. - CORRECT ANSWER=> 60 days to record a lien."
"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=> The quick ratio is the strictest measure of liquidity."
"When should you let your attorney see a construction contract? - CORRECT ANSWER=> After the
contract is prepared but before it is signed."
"How often are FICA taxes reported and paid? - CORRECT ANSWER=> Quarterly"
"Business records must be kept and made available for inspection by the Registrar of
Contractors for a period of after completion of a construction project or operation.
A. One year
B. Two years
C. Three years
D. Five years - CORRECT ANSWER=> Business records must be kept for 5 years."
"Funds withheld to guarantee completion of a project and correction of defects are called a(n): -
CORRECT ANSWER=> Retention"
"Direct costs are $37,000, overhead is 12% and profit is 5%. What is the selling price? - CORRECT
ANSWER=> $44,578.31
Add the 12% overhead and 5% profit together, then subtract that from 100% (83%). Then divide
the total direct cost ($37,000) by the remaining percentage (83%) = 445.7831."
"A mechanics' lien is a written document that must be signed and verified by the claimant. The
first and third steps a contractor should take in filing a lien are listed below. Step 1: Obtain the
exact legal description of the property. Step 2: Step 3: Find out if the person requesting the
work of improvement is the owner. What is Step 2? - CORRECT ANSWER=> Find out the name of
the legal owner of the property as well as the percent of ownership.
3|Page
