NEVADA (NV) CMS CONTRACTOR MANAGEMENT SURVEY EXAM – PRACTICE QUESTIONS AND
CORRECT ANSWERS (VERIFIED ANSWERS) PLUS RATIONALES 2026 Q&A | INSTANT DOWNLOAD PDF.
*Core Domains*
*Licensing Requirements and Regulations*
*Contract Law and Mechanics’ Liens*
*Project Management and Scheduling*
*Financial Management and Accounting*
*Risk Management and Insurance*
*Labor Laws and Employee Safety*
*Nevada Administrative Code (NAC 624)*
*Taxation and Reporting*
*The Nevada CMS Contractor Management Survey Exam is a critical assessment designed to ensure that qu
SECTION ONE: QUESTIONS 1–100
1. Under Nevada law, what is the maximum duration for which a contractor’s license can be suspended
before it is revoked?
A. 3 months
B. 6 months
C. 1 year
D. 2 years
🟢 Correct answer: C. 1 year
🔴 RATIONALE: According to Nevada Revised Statutes, a license may be suspended for a period not to exceed
,1 year, after which the Board may move toward permanent revocation if compliance is not met.
2. A contractor receives a progress payment from an owner. Within how many days must the contractor pay
their subcontractors?
A. 5 days
B. 10 days
C. 15 days
D. 30 days
🟢 Correct answer: B. 10 days
🔴 RATIONALE: Nevada prompt pay laws generally require that prime contractors pay their subcontractors within
10 days of receiving payment from the owner, unless otherwise agreed upon in writing.
3. Which financial statement provides a snapshot of a company’s financial position at a specific point in time?
A. Income Statement
B. Cash Flow Statement
C. Balance Sheet
D. Profit and Loss Statement
🟢 Correct answer: C. Balance Sheet
🔴 RATIONALE: The balance sheet lists assets, liabilities, and equity at a specific date, whereas the other
statements track performance over a period of time.
4. A construction company has a current ratio of 2:1. This indicates:
A. The company has twice as many liabilities as assets.
B. The company is likely unable to pay short-term debts.
,C. The company has $2 in current assets for every $1 in current liabilities.
D. The company is over-leveraged in long-term debt.
🟢 Correct answer: C. The company has $2 in current assets for every $1 in current liabilities.
🔴 RATIONALE: The current ratio is calculated as current assets divided by current liabilities; a 2:1 ratio suggests
healthy liquidity for meeting short-term obligations.
5. What is the primary purpose of a "Notice of Right to Lien" in Nevada?
A. To record a formal lien against a property immediately.
B. To notify the owner that a potential lien claimant is providing work or materials.
C. To stop all work on a project until payment is received.
D. To initiate a lawsuit in small claims court.
🟢 Correct answer: B. To notify the owner that a potential lien claimant is providing work or materials.
🔴 RATIONALE: This notice informs the property owner that the sender may have a future right to place a lien if
they are not paid, serving as a preliminary protective measure.
6. Which federal form is used to verify the identity and employment authorization of individuals hired for
employment in the United States?
A. Form W-2
B. Form 1099
C. Form I-9
D. Form SS-4
🟢 Correct answer: C. Form I-9
🔴 RATIONALE: All U.S. employers must properly complete Form I-9 for every person they hire for employment
in the United States, including citizens and noncitizens.
, 7. In a fixed-price contract, who bears the primary risk of cost overruns?
A. The Owner
B. The Architect
C. The Contractor
D. The Subcontractor
🟢 Correct answer: C. The Contractor
🔴 RATIONALE: In a fixed-price (lump sum) agreement, the contractor agrees to perform the work for a set price;
if costs exceed that price, the contractor's profit margin decreases.
8. According to OSHA standards, at what height must fall protection be provided in general construction?
A. 4 feet
B. 6 feet
C. 10 feet
D. 12 feet
🟢 Correct answer: B. 6 feet
🔴 RATIONALE: OSHA's Fall Protection Standard for the construction industry requires protection for workers on
walking/working surfaces with unprotected sides or edges 6 feet or more above a lower level.
9. What is the penalty for acting as a contractor in Nevada without a valid license for the first offense?
A. A verbal warning only.
B. A fine of up to $1,000.
C. A fine of up to $10,000 and possible jail time.
D. Permanent ban from ever applying for a license.
CORRECT ANSWERS (VERIFIED ANSWERS) PLUS RATIONALES 2026 Q&A | INSTANT DOWNLOAD PDF.
*Core Domains*
*Licensing Requirements and Regulations*
*Contract Law and Mechanics’ Liens*
*Project Management and Scheduling*
*Financial Management and Accounting*
*Risk Management and Insurance*
*Labor Laws and Employee Safety*
*Nevada Administrative Code (NAC 624)*
*Taxation and Reporting*
*The Nevada CMS Contractor Management Survey Exam is a critical assessment designed to ensure that qu
SECTION ONE: QUESTIONS 1–100
1. Under Nevada law, what is the maximum duration for which a contractor’s license can be suspended
before it is revoked?
A. 3 months
B. 6 months
C. 1 year
D. 2 years
🟢 Correct answer: C. 1 year
🔴 RATIONALE: According to Nevada Revised Statutes, a license may be suspended for a period not to exceed
,1 year, after which the Board may move toward permanent revocation if compliance is not met.
2. A contractor receives a progress payment from an owner. Within how many days must the contractor pay
their subcontractors?
A. 5 days
B. 10 days
C. 15 days
D. 30 days
🟢 Correct answer: B. 10 days
🔴 RATIONALE: Nevada prompt pay laws generally require that prime contractors pay their subcontractors within
10 days of receiving payment from the owner, unless otherwise agreed upon in writing.
3. Which financial statement provides a snapshot of a company’s financial position at a specific point in time?
A. Income Statement
B. Cash Flow Statement
C. Balance Sheet
D. Profit and Loss Statement
🟢 Correct answer: C. Balance Sheet
🔴 RATIONALE: The balance sheet lists assets, liabilities, and equity at a specific date, whereas the other
statements track performance over a period of time.
4. A construction company has a current ratio of 2:1. This indicates:
A. The company has twice as many liabilities as assets.
B. The company is likely unable to pay short-term debts.
,C. The company has $2 in current assets for every $1 in current liabilities.
D. The company is over-leveraged in long-term debt.
🟢 Correct answer: C. The company has $2 in current assets for every $1 in current liabilities.
🔴 RATIONALE: The current ratio is calculated as current assets divided by current liabilities; a 2:1 ratio suggests
healthy liquidity for meeting short-term obligations.
5. What is the primary purpose of a "Notice of Right to Lien" in Nevada?
A. To record a formal lien against a property immediately.
B. To notify the owner that a potential lien claimant is providing work or materials.
C. To stop all work on a project until payment is received.
D. To initiate a lawsuit in small claims court.
🟢 Correct answer: B. To notify the owner that a potential lien claimant is providing work or materials.
🔴 RATIONALE: This notice informs the property owner that the sender may have a future right to place a lien if
they are not paid, serving as a preliminary protective measure.
6. Which federal form is used to verify the identity and employment authorization of individuals hired for
employment in the United States?
A. Form W-2
B. Form 1099
C. Form I-9
D. Form SS-4
🟢 Correct answer: C. Form I-9
🔴 RATIONALE: All U.S. employers must properly complete Form I-9 for every person they hire for employment
in the United States, including citizens and noncitizens.
, 7. In a fixed-price contract, who bears the primary risk of cost overruns?
A. The Owner
B. The Architect
C. The Contractor
D. The Subcontractor
🟢 Correct answer: C. The Contractor
🔴 RATIONALE: In a fixed-price (lump sum) agreement, the contractor agrees to perform the work for a set price;
if costs exceed that price, the contractor's profit margin decreases.
8. According to OSHA standards, at what height must fall protection be provided in general construction?
A. 4 feet
B. 6 feet
C. 10 feet
D. 12 feet
🟢 Correct answer: B. 6 feet
🔴 RATIONALE: OSHA's Fall Protection Standard for the construction industry requires protection for workers on
walking/working surfaces with unprotected sides or edges 6 feet or more above a lower level.
9. What is the penalty for acting as a contractor in Nevada without a valid license for the first offense?
A. A verbal warning only.
B. A fine of up to $1,000.
C. A fine of up to $10,000 and possible jail time.
D. Permanent ban from ever applying for a license.
