CALIFORNIA LAW & BUSINESS EXAM PRACTICE TEST
QUESTIONS AND CORRECT ANSWERS (VERIFIED
ANSWERS) PLUS RATIONALES Q&A
| INSTANT DOWNLOAD PDF
1. What is the minimum age requirement to apply for a
California contractor license?
A. 16
B.18
C. 21
D. 25
Applicants must be at least 18 years old to legally enter into contracts in
California.
2. What must a contractor do before working on a project that exceeds
$500 in labor and materials?
A. Register with the local city
B.Obtain a contractor's license
C. Submit blueprints to the county
D. Take OSHA training
A license is legally required for any project over $500 (labor and
materials combined).
, 3. What document is required before beginning construction in
most California jurisdictions?
A. Tax return
B. Lease agreement
C. Building permit
D. Safety training log
Permits ensure that the project complies with local building codes and
zoning laws.
4. Which entity administers contractor licensing in California?
A. Department of Justice
B.Contractors State License Board (CSLB)
C. Department of Building and Safety
D. California Secretary of State
The CSLB regulates contractors and enforces licensing laws.
5. How often must a contractor renew their license in California?
A. Every year
B.Every two years
C. Every five years
D. Every six months
Licenses must be renewed every two years to remain active.
6. Which of the following protects homeowners from incomplete
or substandard work?
A.Contractor's bond
B. Material lien
C. Subcontractor payment
D. Business license
The contractor’s bond ensures financial responsibility and provides
consumer protection.
, 7. What is the minimum bond amount for a contractor’s license
in California as of 2024?
A. $5,000
B. $25,000
C. $15,000
D. $30,000
As of 2023, the CSLB requires a $25,000 contractor bond.
8. Who is responsible for verifying employee eligibility to work in
the U.S.?
A. Labor commissioner
B. CSLB
C. The contractor (employer)
D. State auditor
Employers must complete I-9 forms to confirm employee eligibility.
9. What insurance must all contractors with employees carry?
A. Auto insurance
B.Workers’ compensation insurance
C. Property insurance
D. Health insurance
Workers' compensation is required to protect employees injured on the
job.
10. What is the consequence for contracting without a license
in California?
A.Misdemeanor and potential fines or jail time
B. Warning only
C. Immediate license issuance
D. Civil citation only
Unlicensed contracting is a criminal offense and can lead to prosecution.
, 11. Which tax form is typically used to report employee wages?
A. W-4
B.W-2
C. 1099
D. W-9
The W-2 form is used to report wages, taxes, and deductions for
employees.
12. Which of the following is required on a home
improvement contract over $500?
A. Verbal agreement
B.Written contract
C. Business card
D. Verbal and handshake agreement
Home improvement contracts must be in writing if the total cost
exceeds $500.
13. A joint control company is used to:
A. Enforce safety standards
B.Hold funds and disburse payments as work progresses
C. Advertise projects
D. Inspect materials
Joint control companies manage funds to protect all parties and ensure
progress.
14. The Preliminary Notice must be served within how many days
of first furnishing labor or materials?
A. 10 days
QUESTIONS AND CORRECT ANSWERS (VERIFIED
ANSWERS) PLUS RATIONALES Q&A
| INSTANT DOWNLOAD PDF
1. What is the minimum age requirement to apply for a
California contractor license?
A. 16
B.18
C. 21
D. 25
Applicants must be at least 18 years old to legally enter into contracts in
California.
2. What must a contractor do before working on a project that exceeds
$500 in labor and materials?
A. Register with the local city
B.Obtain a contractor's license
C. Submit blueprints to the county
D. Take OSHA training
A license is legally required for any project over $500 (labor and
materials combined).
, 3. What document is required before beginning construction in
most California jurisdictions?
A. Tax return
B. Lease agreement
C. Building permit
D. Safety training log
Permits ensure that the project complies with local building codes and
zoning laws.
4. Which entity administers contractor licensing in California?
A. Department of Justice
B.Contractors State License Board (CSLB)
C. Department of Building and Safety
D. California Secretary of State
The CSLB regulates contractors and enforces licensing laws.
5. How often must a contractor renew their license in California?
A. Every year
B.Every two years
C. Every five years
D. Every six months
Licenses must be renewed every two years to remain active.
6. Which of the following protects homeowners from incomplete
or substandard work?
A.Contractor's bond
B. Material lien
C. Subcontractor payment
D. Business license
The contractor’s bond ensures financial responsibility and provides
consumer protection.
, 7. What is the minimum bond amount for a contractor’s license
in California as of 2024?
A. $5,000
B. $25,000
C. $15,000
D. $30,000
As of 2023, the CSLB requires a $25,000 contractor bond.
8. Who is responsible for verifying employee eligibility to work in
the U.S.?
A. Labor commissioner
B. CSLB
C. The contractor (employer)
D. State auditor
Employers must complete I-9 forms to confirm employee eligibility.
9. What insurance must all contractors with employees carry?
A. Auto insurance
B.Workers’ compensation insurance
C. Property insurance
D. Health insurance
Workers' compensation is required to protect employees injured on the
job.
10. What is the consequence for contracting without a license
in California?
A.Misdemeanor and potential fines or jail time
B. Warning only
C. Immediate license issuance
D. Civil citation only
Unlicensed contracting is a criminal offense and can lead to prosecution.
, 11. Which tax form is typically used to report employee wages?
A. W-4
B.W-2
C. 1099
D. W-9
The W-2 form is used to report wages, taxes, and deductions for
employees.
12. Which of the following is required on a home
improvement contract over $500?
A. Verbal agreement
B.Written contract
C. Business card
D. Verbal and handshake agreement
Home improvement contracts must be in writing if the total cost
exceeds $500.
13. A joint control company is used to:
A. Enforce safety standards
B.Hold funds and disburse payments as work progresses
C. Advertise projects
D. Inspect materials
Joint control companies manage funds to protect all parties and ensure
progress.
14. The Preliminary Notice must be served within how many days
of first furnishing labor or materials?
A. 10 days
