C54 License Law Final Exam Questions
With Correct Answers
Which |is |true |of |depreciation?
A. |If |depreciation |is |not |shown |on |the |income- |statement, |this |will |under-estimate |your
|income
B. |Depreciation |is |not |shown |on |the |Balance |Sheet
C. |Is |the |decrease |in |the |value |of |all |assets
D. |Depreciation |is |an |expense |that |lowers |your |tax |liability |- |CORRECT |ANSWER✔✔-
Depreciation |is |an |expense |that |lowers |your |tax |liability.
Depreciation |is |a |measurement |of |the |"useful |life" |of |a |business |asset,such |as |machinery |or |a
|factory, |to |determine |the |multiyear |period |overwhich |the |cost |of |that |asset |can |be |deducted
|from |taxable |income.Instead |of |allowing |businesses |to |deduct |the |cost |of
|investmentsimmediately |(i.e., |full |expensing), |depreciation |requires |deductionsto |be |taken
|over |time, |reducing |their |value |and |discouraging |investment.
Which |of |the |following |is |correct?
A. |To |keep |a |license, |a |contractor |cannot |have |the |license |lapse |more |than |6-years
B. |"Preliminary |Notices", |need |to |be |filed |within |20-days |from |the |contract |date
C. |A |down-payment |must |be |returned |within |10-days |from |date |of |cancellation.
D. |Copies |of |contracts |should |be |kept |3-years |- |CORRECT |ANSWER✔✔-A |down-payment |for |a
|Home-Improvement |Contract |must |be |returned |within |10-days |from |date |of |cancellation.
Which |agency |is |correctly |paired |with |its |function?
, A. |CA |Dept. |of |Tax |& |Fee |Administration |(CDTFA) |- |collects |state |sales |tax |(and |use |tax)
B. |Franchise |Tax |Board |- |collects |unemployment |tax.
C. |Employment |Development |Department |- |administers |Workers |Compensation |Insurance.
D. |Internal |Revenue |Service |- |collects |State |Disability |Insurance.. |- |CORRECT |ANSWER✔✔-CA
|Dept. |of |Tax |& |Fee |Administration |(CDTFA) |- |collects |state |sales |tax |(and |use |tax).
A. |The |California |Department |of |Tax |and |Fee |Administration |(CDIFA) |is |the |public
|agencycharged |with |assessing |and |collecting |sales |and |use |taxes, |as |well |as |a |varietyof |excise
|fees |and |taxes, |for |the |U.S., |state |of |California.
In |order |to |get |a |short-term |loan |from |a |bank, |the |bank |will |depend |on: |- |CORRECT
|ANSWER✔✔-Quick |Ratio |- |The |quick |ratio |is |another, |more |conservative |way |of |testing |the
|adequacy |of |the |current |liquidity |of |the |company. |Instead |of |using |current |assents, |quick
|assents |are |substituted |because |these |are |quickly |covered |into |cash. |One |simple |method |of
|determining |the |quick |assets |is |total |current |assets |minus |inventories. |Quick |Ratio: |Quick
|Assets |/ |Current |Liabilities
A |"Mechanic's |Lien |Warning" |must |be: |- |CORRECT |ANSWER✔✔-Mechanic's |Lien |Warning"
|must |be |written |in |clear |and |simple |language.
Which |of |the |following |contractors |do |NOT |need |a |contractor's |license?
A. |Installing |drapes.
B. |Installing |a |wall |air-conditioner |unit.
C. |Installing |carpet.
D. |Installing |a |security |alarm |system |- |CORRECT |ANSWER✔✔-D. |Installing |a |security |alarm
|system.
With Correct Answers
Which |is |true |of |depreciation?
A. |If |depreciation |is |not |shown |on |the |income- |statement, |this |will |under-estimate |your
|income
B. |Depreciation |is |not |shown |on |the |Balance |Sheet
C. |Is |the |decrease |in |the |value |of |all |assets
D. |Depreciation |is |an |expense |that |lowers |your |tax |liability |- |CORRECT |ANSWER✔✔-
Depreciation |is |an |expense |that |lowers |your |tax |liability.
Depreciation |is |a |measurement |of |the |"useful |life" |of |a |business |asset,such |as |machinery |or |a
|factory, |to |determine |the |multiyear |period |overwhich |the |cost |of |that |asset |can |be |deducted
|from |taxable |income.Instead |of |allowing |businesses |to |deduct |the |cost |of
|investmentsimmediately |(i.e., |full |expensing), |depreciation |requires |deductionsto |be |taken
|over |time, |reducing |their |value |and |discouraging |investment.
Which |of |the |following |is |correct?
A. |To |keep |a |license, |a |contractor |cannot |have |the |license |lapse |more |than |6-years
B. |"Preliminary |Notices", |need |to |be |filed |within |20-days |from |the |contract |date
C. |A |down-payment |must |be |returned |within |10-days |from |date |of |cancellation.
D. |Copies |of |contracts |should |be |kept |3-years |- |CORRECT |ANSWER✔✔-A |down-payment |for |a
|Home-Improvement |Contract |must |be |returned |within |10-days |from |date |of |cancellation.
Which |agency |is |correctly |paired |with |its |function?
, A. |CA |Dept. |of |Tax |& |Fee |Administration |(CDTFA) |- |collects |state |sales |tax |(and |use |tax)
B. |Franchise |Tax |Board |- |collects |unemployment |tax.
C. |Employment |Development |Department |- |administers |Workers |Compensation |Insurance.
D. |Internal |Revenue |Service |- |collects |State |Disability |Insurance.. |- |CORRECT |ANSWER✔✔-CA
|Dept. |of |Tax |& |Fee |Administration |(CDTFA) |- |collects |state |sales |tax |(and |use |tax).
A. |The |California |Department |of |Tax |and |Fee |Administration |(CDIFA) |is |the |public
|agencycharged |with |assessing |and |collecting |sales |and |use |taxes, |as |well |as |a |varietyof |excise
|fees |and |taxes, |for |the |U.S., |state |of |California.
In |order |to |get |a |short-term |loan |from |a |bank, |the |bank |will |depend |on: |- |CORRECT
|ANSWER✔✔-Quick |Ratio |- |The |quick |ratio |is |another, |more |conservative |way |of |testing |the
|adequacy |of |the |current |liquidity |of |the |company. |Instead |of |using |current |assents, |quick
|assents |are |substituted |because |these |are |quickly |covered |into |cash. |One |simple |method |of
|determining |the |quick |assets |is |total |current |assets |minus |inventories. |Quick |Ratio: |Quick
|Assets |/ |Current |Liabilities
A |"Mechanic's |Lien |Warning" |must |be: |- |CORRECT |ANSWER✔✔-Mechanic's |Lien |Warning"
|must |be |written |in |clear |and |simple |language.
Which |of |the |following |contractors |do |NOT |need |a |contractor's |license?
A. |Installing |drapes.
B. |Installing |a |wall |air-conditioner |unit.
C. |Installing |carpet.
D. |Installing |a |security |alarm |system |- |CORRECT |ANSWER✔✔-D. |Installing |a |security |alarm
|system.
