Law & Business 2 Flashcards
If you find that work done by a previous contractor is in violation of the local building code, what should you do?
a. Repair the violation immediately.
b. Report the violation to the owner with an estimate for the needed repairs.
c. Report the violation directly to the building department.
d. The contractor may ignore the violation.
b. Report the violation to the owner with an estimate for the needed repairs.
If you are required to report employment taxes or give tax statements, the _____ must obtain a federal Employer Identification Number.
a. employee and employer
b. employee
c. employer
d. bookkeeper
c. employer
When preparing a bid, you should:
a. evaluate the effect of unexpected delays on costs
b. put as little in writing as possible
c. schedule the job to slightly overload your capacity
d. none of the above
a. evaluate the effect of unexpected delays on costs
For which of the following injuries does Cal/OSHA require employers to make and keep records?
a. Worker is knocked unconscious but returns to work after resting for one hour.
b. Worker suffers a burn that requires a one-time visit to the doctor.
c. Worker develops a chronic allergy after repeated exposure to fiberglass insulation.
d. All of the above.
c. Worker develops a chronic allergy after repeated exposure to fiberglass insulation.
An income statement shows:
a. assets and liabilities over an extended period of time
b. revenues and losses at a certain point in time
c. assets and liabilities at a certain point in time
d. revenues and expenses over an extended period of time
d. revenues and expenses over an extended period of time
Except in an emergency, you must notify the regional Underground Service Alert Notification Center no less than _____ nor more than _____ starting excavation work.
a. 1 day before … 14 days before
b. 2 days before … 14 days after
c. 2 days before … 14 days before
d. 3 days before … 28 days after
c. 2 days before … 14 days before
If a subcontractor were to serve the owner with a stop notice, the most likely reason would be to:
a. inform the owner that the subcontractor has not been paid by the prime, and the owner must set aside sufficient funds to pay the subcontractor’s bill
b. inform the owner that the owner’s property will be attached if payment is not made
c. notify the owner that a lien will be filed against the property if the subcontractor is not paid
d. notify the owner that the subcontractor has completed his portion of the work
a. inform the owner that the subcontractor has not been paid by the prime, and the owner must set aside sufficient funds to pay the subcontractor’s bill
“Contractors are required by law to be licensed and regulated by the Contractors’ State License Board. Any questions concerning a contractor may be referred to the Registrar, Contractors’ State License Board, P.O. Box 26000, Sacramento, California, 95826.” This statement must be on:
a. all prime contracts
b. all prime contracts and subcontracts
c. all prime contracts, subcontracts, and advertising
d. only contracts for jobs over $500
a. all prime contracts
A contractor bids on a home improvement project and earns the bid. Later, he decides not to take the job. Which bond would protect the home owner?
a. bid bond
b. performance bond
c. contract bond
d. completion bond
a. bid bond
How many days of inactivity must pass before a notice of cessation may be recorded?
a. 10 days
b. 30 days
c. 60 days
d. 90 days
b. 30 days
A(n) _____ is used to analyze the income and outflow of cash during a period of time.
a. balance sheet
b. income statement
c. profit plan
d. cash flow statement
d. cash flow statement
To whom does an employer pay FUTA tax?
a. Employment Development Department
b. Internal Revenue Service
c. U.S. Department of Labor
d. State Franchise Tax Board
b. Internal Revenue Service
Excavators must clearly mark the boundaries of a work area, usually with _____ paint.
a. red
b. yellow
c. brown
d. white
d. white
An employer who receives a citation for a serious violation of Cal/OSHA regulations can be assessed a penalty of up to _____ for each violation.
a. $1,000
b. $5,000
c. $10,000
d. $25,000
d. $25,000
How long should a contractor keep employee records?
a. 1 year
b. 2 years
c. 3 years
d. for as long as the employee is employed
c. 3 years
What is the best way to determine if your company is profitable?
a. Ask the crew supervisors.
b. Compare the size of inventory with last year’s.
c. Examine the income and expense statement.
d. Examine the balance sheet.
c. Examine the income and expense statement.
Unsafe or faulty equipment is found on a job site. What should be done?
a. The contractor should call Cal/OSHA.
b. It is the contractor’s responsibility to correct the problem.
c. It is the property owner’s responsibility to correct the problem.
d. It is the employees’ responsibility to correct the problem.
b. It is the contractor’s responsibility to correct the problem.
How often should a job supervisor or responsible managing employee visit the job site?
a. once a day
b. once a week
c. once a month
d. whenever he is near the job site
a. once a day
When calculating unemployment and disability insurance taxes, an employer would not include:
a. bonuses
b. severance pay
c. wages
d. overtime pay
b. severance pay
Which of the following is not covered by standard contractor’s insurance policies?
a. employees’ tools
b. contractor’s tools
c. damage from fire, storm, theft, and vandalism
d. job materials
a. employees’ tools
An employer must file federal Form 1099-MISC to report payments of _____ or more per calendar year to persons not treated as employees (e.g., independent contractors) for services performed for the business.
a. $200
b. $300
c. $450
d. $600
d. $600
There is a near-miss safety situation on a job. What steps should the employer take?
a. Report the near-miss to DOSH.
b. Report the near-miss to the workers’ compensation insurance carrier.
c. The unsafe situation must be investigated, and the investigation must include a written report.
d. The unsafe situation must be investigated, but a written report is not required.
c. The unsafe situation must be investigated, and the investigation must include a written report.
Suppose you include depreciation on your income statement your first year in business, but you do not include it in the second year. How will this affect your net income being reported?
a. It is illegal to omit depreciation.
b. Your net income will be the same for both years.
c. Your net income will be less than it should be in the second year.
d. Your net income will be greater than it should be in the second year.
d. Your net income will be greater than it should be in the second year.
After the building plans are approved, what is the next step?
a. review the plans for errors or corrections
b. hire employees
c. schedule the job
d. order materials
a. review the plans for errors or corrections
How often are FUTA tax deposits made by most employers?
a. weekly
b. monthly
c. quarterly
d. yearly
c. quarterly
A contractor has been turned in to DOSH by an employee for a safety violation. The contractor wants to find out who reported the violation and asked DOSH for the employee’s name. What will DOSH likely do?
a. Through due-process procedures, DOSH will identify the employee, but no retaliation may be directed at the employee.
b. Through due-process procedures, DOSH will identify the employee, but the employee may not be fired.
c. DOSH will release the employee’s name for a fee, and the contractor may deal with the employee in any way the contractor chooses.
d. Unless requested otherwise, DOSH will keep confidential the name of any person making a complaint, and no retaliation may be directed at the employee if the employee’s identity is discovered.
d. Unless requested otherwise, DOSH will keep confidential the name of any person making a complaint, and no retaliation may be directed at the employee if the employee’s identity is discovered.
A balance sheet shows:
a. revenues and expenses over an extended period of time
b. assets and liabilities over an extended period of time
c. assets and liabilities at a certain point in time
d. revenues and expenses at a certain point in time
c. assets and liabilities at a certain point in time
A subcontractor must file a mechanics’ lien with the:
a. County Clerk
b. County Recorder
c. owner
d. lender
b. County Recorder
A consumer may cancel a home solicitation contract at any time prior to midnight of the _____ after the date of the transaction.
a. 2nd business day
b. 3rd business day
c. 5th business day
d. 7th calendar day
b. 3rd business day
If you are a subcontractor, there are three general steps in the mechanics’ lien procedure to make sure you are paid for works of improvement upon property. Step 1: Determine the exact legal description of the property (map book, page, etc.). Step 2: Step 3: Complete the work and record a Claim of Lien if you are not paid on time. What is Step 2?
a. Request prepayment for your work.
b. Serve a preliminary 20-day notice.
c. Run credit checks on the owner and prime contractor.
d. List the attorney representing the subcontractor.
b. Serve a preliminary 20-day notice.
Using money from a current job to pay for unrelated projects is called:
a. diversion
b. usury
c. penury
d. transmigration
a. diversion
A prime contractor decides to sub out the electrical work. How would the prime determine what price to add for the electrical work?
a. The prime calls up the electrical material supplier and calculates the bid amount.
b. The prime gets an estimate from the subcontractor.
c. Everybody charges a flat rate.
d. The prime gets a firm bid from the subcontractor.
d. The prime gets a firm bid from the subcontractor.
Bob Smith is the RME for the XYZ Construction Co., where he works all week. His own construction business, under a different name and license number, builds decks on weekends. Is this an acceptable practice for Bob?
a. Yes: Bob may qualify as many licenses as he desires.
b. Yes: Bob may qualify both licenses provided that he is regularly employed by XYZ and is actively involved in the operation of the business at least 32 hours per week or 80% of XYZ’s total operating hours per week, whichever is less.
c. No: Bob must take another qualifying exam to qualify a second license.
d. No: Bob may qualify only XYZ Co.’s license in this case.
d. No: Bob may qualify only XYZ Co.’s license in this case.
You are at a critical point in a project, and the owner tells you that something already completed was not done correctly. What should you do?
a. Tell the owner you will attend to the matter after you complete the critical work you are doing.
b. Stop work on the critical job and remedy the error.
c. Hire more workers to remedy the error.
d. Ask the owner to sign a change order.
a. Tell the owner you will attend to the matter after you complete the critical work you are doing.
In the cash system of accounting, a transaction is recorded or posted:
a. when cash changes hands
b. when an amount is approved for payment
c. when an amount is invoiced
d. when cash is earned and expenses are incurred
a. when cash changes hands
Which of the following is a correct statement about budgets?
a. Budgets do not require accurate books.
b. Budgets do not require detailed cost information.
c. The goal of a budget is to forecast expenses as accurately as possible.
d. A budget should allow leeway for month-to-month variations.
d. A budget should allow leeway for month-to-month variations.