Law test Flashcards
How long does a client have to cencel a contract for repairs that resulted from an event which a State of Emergency was declared
a) 5 business days
b) 5 calendar days
c) 7 business days
d) 7 calendar days
7 business days
Which of the following is considered a direct cost
a) office personnel
b) monthly rent for construction office
c) insurance policies
d) field superintendent
field superintendent
Why?
Direct costs are the expenses a business incurs that can be directly tied to the production of a good or the provision of a service
A, b and c are indirect cost
When may a client cancel a service and repair contract
a) when the repair or service is under $750
b) within 3 days of signing the contract
c) before the contractor starts work
d) at any time if the contract was initiated by the client
before the contractor starts work
When a subcontractor does work on a public works contract, the public agency considers the subcontractor to be
a) an employee of the agency
b) a subcontractor of the agency
c) an employee of the prime contractor
d) a subcontractor of the contractor
an employee of the prime contractor
DOSH must investigate a complaint charging a serious violation of health or safety standards within
a) one working day
b) two working days
c) three working days
d) five calendar days
three working days
non serious violations within 14 calendar days
Insured employers must report ever work related illness or injury to their workers’ compensation carrier with in _____ of the incident
a) 24 hours
b) 2 days
c) 5 days
d) 10 days
5 days
Which of the following financial ratios is the strictest measure of liquidity
a) quick ratio
b) current ratio
c) profitability ratio
c) leverage ratio
quick ratio (acid test)
An employer remit State income tax and state disability taxes withheld from an employee’s wage to the
a) Internal revenue service
b) Employment Development Department
c) Frachise Tax Board
d) Board of Equalization
Employment Development Department
To whom do you report and pay sales tax
a) County Tax Collector
b) Internal Revenue Services
c) California Department of Tax and Fee Administration
d) Franchise tax Board
California Department of Tax and Fee Administration
On a time-and-material job, you should
a) not charge for profit and overhead
b) add profit and overhead to labor only
c) add profit and overhead to material only
d) add profit and overhead to labor and materials
add profit and overhead to labor and material
Which agency should sole owners contact to obtain a fictitious business name (DBA) if they do not want to use their legal name for the construction business
a) CSLB
b) Department of Consumer and Business Affairs
c) Secretary of State
d) city or county government
city or county government
Is it legal for a contractor to require employees to take a lie detector test
a) It is not legal for a contractor to require lie detector tests, but it would be legal for a federal, state, or local public agency to require lie detector test of their employees
It is not legal for a contractor to require lie detector tests, but it would be legal for a federal, state, or local public agency to require lie detector test of their employees
Which of the following statement about home improvement laws is not correct
a) subcontractor may give a salesperson a bonus
b) a general contractor may give a salesperson a bonus
c) a subcontractor may not give the general contractor a bonus
d) The homeowner may give the salesperson a bonus
The homeowner may give the salesperson a bonus
A notice of Cessation is only effective if labor has ceased for at least how many days prior to recording
a) 30 days
b) 20 day
c) 15 days
d) 10 days
30 days
A mechanics lien is a written document that must be signed and verified by the claimant.
Step 1: Obtain the exact legal description of the property
Step 2:
Step 3: Find out if the person requesting the work improvement of improvement is the owner
What is step 2
a) Determine the amount of the lien claim
b) Find out the name of the legal owner of the property as well as the percent of ownership
c) List the attorney representing the contractor
d) List the attorney representing the owner
Find out the name of the legal owner of the property as well as the percent of ownership
What does it mean when a subcontractor signs aWaiver and Release form on a publiv works project
a) gives up right to lien the real property
b) gives up the right to lien the construction funds
c) waives right to lien the real property or the construction funds
d) is no longer responsible for correcting defector work
gives up the right to lien the construction funds
Several prospective employees remembered their Social Security numbers but did not have a card or other documentation. The practice of relying on memorized SSN is
a) acceptable: A memorized SSN is sufficient
b) acceptable: New employees do not have to provide documentation of their SSN
c) acceptable: Employees must show documentation of their SSN only if they are resident aliens working in this country
d) unacceptable: The actual Social Security card should have been inspected
acceptable: A memorized SSN is sufficient
Which of the following methods of accounting is not recommended for contractors
a) accrual
b) percentage
c) completed contract
d) cash
cash
Accrual method is recommended.
percentage and completed are modifications of accrual
Where must a contractor include the “Mechanical Lien Warning”
a) home improvement and service and repair contracts
b) home improvement contracts, including swimming pool contracts
c) home improvement, swimming pool, and service and repair contracts
d) public works contracts
Home improvement contracts, including swimming pool contracts
Mechanics Lien warning is not required for service and repair contracts
Within how many days must an employer make personnel records available for inspection by an employee after receiving a written request
a) immediately
b) no later than 10 calendar days
c) no later than 30 calendar days
d) within 60 working days
no later than 30 calendar days
After the building plans are approved, what is the next step
a) review the plans and estimate
b) hire employees
c) schedule the job
d) order materials
review the plans and estimate
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 they are near the job site
once a day
A contractor finds a 6 inch discrepancy on a set of plans. He should
a) make the correction
b) contact the owner
c) ignore the discrepancy because it is minor
d) contact the architect or the building designer
contact the architect or the building designer
The required injury and illness Prevention Program (IIPP) takes the form of
a) written plan
b) oral safety talks supplemented by a written plan
c) an oral or written plan approved by the contractor and an employee representative
d) a written plan that includes procedures and that is put into practice and documented
a written plan that includes procedures and that is put into practice and documented
Written an put into practice
Which of the following injuries must be reported to DOSH
a) Worker suffers a concussion and is unable to return to work for a full day
b) Worker suffers a burn than requires first aid
c) all job related injuries must be reported
d) employers are not required to report injuries unless they are series
Worker suffers a concussion and is unable to return to work for a full day
must be reported if results in absence from a full day of work
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) $1000
b) $5000
c) $10000
d) $25000
$25000
serious civil penalty up to $30000
not serious is up to $8000
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 incured
when cash is earned and expenses are incured
not recommended for contractors
Employees must provide the contractor with Form W-4
a) with their job application
b) when they start work
c) within 10 days of starting work
d) no later than January 31 of each year
when they start work
A supplier who is furnishing a contractor with equipment or materials without any form of security other than the reputation of the contractor for paying debts when due has extended what type of credit
a) unsecured loan
b) open account
c) uninsured load
d) closed account
open account
To whom does an employer pay FUTA tax
a) Employment Development Department
b) Internal Revenue Service
c) US Department of Labor
d) State Franchise Tax Board
Internal Revenue Service
Federal payroll taxes are collected by the IRS
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
a budget should allow leeway for month to month variations
a budget is not to forecast but establish ideal level of expense and income
a home improvement salesperson’s (HIS) registration must be renewed every
a) four years
b) two years
c) year
d) job
two years
renewal is 2 years of last day of the month issued
Bob Smith is the RME and works full time for XYZ Construction Co. Bob holds an individual license with a different name and license number and want to bid and build wood decks on weekends. Is this legal?
a) Yes: Bob may qualify an unlimited number of active contractor’s license
b) Yes: Bob may work under his individual license if he works at least 32 hours a week for XYZ
c) No: Bob must take another qualifying exam to qualify a second license
d) No: Bob may qualify only with XYZ license in this case
No: Bob may qualify only with XYZ license in this case
If Bob is a RME with XYZ, he must inactivate his individual contractor’s license
An individual who meets certain conditions may serve as a qualifier for up to ____ firms in any one year
a) one
b) two
c) three
d) four
three, they own 20% equity of each firm
As a subcontractor on a public work of improvement, you complete your contract in a workmanlike manner. The prime contractor, Mr Adams, informs you that he cannot pay you. One of your best options is to file a stop payment notice, which has what effect
a) it starts foreclosure proceedings
b) it instructs Mr Adams to “stop” work until you are paid, or else face felony charges
c) it creates a lien on the construction funds
d) it creates a lien on the property you improved
it creates a lien on the construction funds
Stop payment notice - lien on funds
mechanics lien - stop payment notice may be filed on a public works project
Of the following, which is usually the most difficult item to estimate
a) labor
b) materials
c) overhead
d) profit
labor
How long should a contractor keep employee payroll records
a) 3 years
b) 2 years
c) 1 year
d) for as long as a worker is employed
3 years
_____, although usually the largest single item in a bid, can be fairly accurately determined
a) permit
b) overhead
c) labor
d) materials
materials
Disabled access laws went into effect in ____ for public buildings and in _____ for private buildings
a) 1960, 1961
b) 1968, 1970
c) 1970, 1971
d) 1975, 1976
1968, 1970
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 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
your net income will be greater than it should be in the second year
depreciation is an expense
What happens to a partnership if a general partner leaves the business or dies
a) nothing
b) the partnership will have to merge with another business
c) The partnership license will be converted to an individual license
d) the partnership license will be cancelled
The partnership license will be cancelled
a new license must be applie for
Of the following, which is the best way to monitor and analyze labor cost
a) use detailed time cards with task breakdown for each worker
b) compare previous labor cost
c) ask crew supervisor
d) check the profit and loss statement
use detailed time cards with task breakdown for each worker
In most construction contracts, the retention may be held up to ____ days as a guarantee that the prime pays the subcontractors and suppliers
a) 10
b) 30
c) 60
d) 90
60
subcontractors and suppliers have 30 days to record liens
primary has 60 days to record a lien
How long are contractors required to keep records after completing a construction project
a) 2 years
b) 5 years
c) 7 years
d) 10 years
5 years
A notice cancelling a home solicitation contract become effective
a) when the written notice is deposited in the mail
b) when signed be the owner
c) the day the owner cancels by telephone
d) within 72 hours from the postmark on the cancellation letter
when the written notice is deposited in the mail
If the owner cancels a home solicitation on March 20, by what date must the contractor return the down payment
a) march 23
b) march 30
c) april 1
d) april 30
march 30
return down payment within 10 days
How many days does a subcontractor have to file a lien after a Notice of Cessation is recorded
a) 10 days
b) 30 days
c) 60 days
d) 90 days
30 days
If no notice of Completion or Cessation is given on a job, how many days does a contractor have to file a mechanics lien after completion of work
a) 30 days
b) 60 days
c) 90 days
d) 180 days
90 days
if neither notice is given, all claimants have 90 days from completion of work to file liens
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
a) Request prepayment for you work
b) Serve a preliminary 20-day notice
c) Run credit checks on the owner and prime contractor
d) List the attorney representing the contractor
Serve a preliminary 20 day notice
Can also file Preliminary Notice with County Recorder.
A contract bond
a) is required to obtain a corporate contractor’s license
b) guarantees payment of labor and materials only
c) guarantees job completion only
d) guarantees job completion and payment of all labor and materials
guarantees job completion and payment of all labor and materials
contract bond is a type of surety bond that guarantees that a contract will be fulfilled
Who determines the prevailing wage rate on public works projects
a) prime contractor negotiates rate with workers
b) CSLB
c) EDD
d) DIR
DIR
Department of Industrial Relations
Which of the following payroll taxes does not have a limit
a) FICA
b) FUTA
c) FIT
d) SDI
FIT
Federal Income Tax has no limit
How long must a contractor retain records for employees exposed to hazardous materials
a) 15 years
b) 30 years
c) 40 years
d) as long as an employee works for the contractor
30 years
Which of the following is classified as a job related direct cost
a) performance bond
b) contractor’s license renewal fee
c) trade association membership fee
d) office rent
performance bond
direct cost because they are directly chargeable to individual job
Home solicitation Contracts must include a notice call the “Three Day Right to Cancel” in at least ___
typeface
12 pt bold
Except in an emergency, refunds must be made within ____ of cancellation
10 days
If you get a quote from a material supplier, the quote is
a) not firm and can change
b) a guarantee price that cannot increase
c) firm and includes all materials
d) firm but may not include all materials
firm but may not include all materials
Who is responsible for selecting supplies for a first a kit for a jobsite
a) first aid kit
b) doctor
c) nurse
d) RN
doctor
