Law Test 4 Flashcards by Trevor Horner

In which court do you pursue a lawsuit of exactly $25,000?
a) Municipal
c) Superior
b) Small Claims
d) District

a) Municipal

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What must licensed plumbing, electrical sign, and well drilling contractors have displayed on both sides of their commercial vehicles?
a) name, business address, phone number, and contractor’s license number
b) name, business address, and contractor’s license number
c) name and contractor’s license number only
d) nothing

b) name, business address, and contractor’s license number

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2) Employees working on Sunday are normally paid:
a) time and a half
b) double time
c) regular time
d) triple time

c) regular time

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Which of the following jobs does not require a contractor’s license?
a) building a six-foot high fence
b) painting the interior or exterior of a building
c) installing a French door
d) construction of an oil derrick

d) construction of an oil derrick

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The purpose of a specification sheet attached to a set of plans is to:
a) show a certain detail on the plan.
b) show what materials need to be used.
c) let the contractor know what has to be done.
d) show specific dates of completion.

c) let the contractor know what has to be done.

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How can a new employee learn about the safety record of a company?
a) View a Cal/OSHA safety video tape.
b) The employer must post a summary record of job-related injuries and illnesses once a year.
c) Call the Cal/OSHA consultant services.
d) None of the above.

b) The employer must post a summary record of job-related injuries and illnesses once a year.

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Which could a contractor not otherwise determine without going to the job site?
a) measurements of the walls and ceiling
b) what materials are needed
c) which subcontractors to use for the job
d) location of the electrical source

d) location of the electrical source

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One of your customer’s accounts has gone past 30 days. What is the best method of handling it?
a) Begin to charge interest on the customer’s account.
b) Send it to a collection agency.
c) Contact the customer and put them on a new payment schedule.
d) Stop work immediately.

a) Begin to charge interest on the customer’s account.

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What is the best method of adjusting inventory in the general ledger?
a) counting the existing inventory
b) adding new purchases
c) averaging last year’s inventory d) subtracting what you have used

a) counting the existing inventory

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Where can workers obtain the name of the employer’s current workers’ compensation insurance carrier?
a) From the notice printed on every paycheck.
b) Only if the employer chooses to disclose the name of the carrier.
c) By phoning the employer’s insurance agent.
d) From the notice that must be posted conspicuously in a location frequented by employees.

d) From the notice that must be posted conspicuously in a location frequented by employees.

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Which of the following statements is true?
a) a 17 year old can legally drive a forklift
b) a 17 year old can legally work on a roof
c) an 18 year old can legally drive a vehicle as part of his normal job duties
d) a 15 year old can legally work in a tunnel

c) an 18 year old can legally drive a vehicle as part of his normal job duties

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A Notice to Owner is there for the protection of:
a) the contractor.
c) the contractor’s employees.
b) the owner.
d) all of the above.

b) the owner.

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You sign a contract that includes fixing the hinges of a home owner’s door. After finishing the work, the owner complains that you did not remove the dog scratches from the door’s finish. Which is the best way to avoid a dispute or lawsuit?
a) Write a change order.
b) Be very specific about the work to be done: Review the contract and specifications line-by-line with the owner.
c) Schedule an on-site meeting with the owner.
d) Have an attorney explain the job description to the owner.

b) Be very specific about the work to be done: Review the contract and specifications line-by-line with the owner.

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How much can a contractor raise his prices during a declared state of emergency and not be guilty of price-gouging?
a) 25% b) 20% c) 10% d) 5%

c) 10%

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A bookkeeper for a construction company sends out bills once a month. Where should the company file its copy of each bill?
a) accounts receivable b) accounts payable c) notes payable d) operating profit

a) accounts receivable

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When should an employer provide information on safety procedures?
a) Once a month to a supervisor.
b) When it is updated by Cal/OSHA.
c) When a new employee is hired.
d) None of the above.

c) When a new employee is hired.

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Form I-9 must be completed by all employees, including U.S. citizens. When must an employer complete form I-9?
a) when they apply for the job
b) the first day they start work
c) within 30 business days of the date of hire d) within 3 business days of the date of hire

d) within 3 business days of the date of hire

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A time card includes the day and hours the person worked, as well as:
a) a description of the work
b) the hourly wage
c) the location of the job
d) the employees date of birth

a) a description of the work

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Records of accidents and injuries are kept:
a) for the exclusive benefit of employees
b) to show the insurance adjuster
c) to help determine the causes of accidents and injuries
d) to show the clients you are responsible

c) to help determine the causes of accidents and injuries

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On a small job, what is the best way to make an efficient schedule?
a) critical path method (CPM)
b) talk to suppliers to arrange around their schedules
c) talk to subs to arrange around their schedules
d) bar chart

d) bar chart

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The minimum fine for unlawful asbestos removal is:
a) $500
c) $5,000
b) $1,000
d) $7,000

b) $1,000

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When putting together a basic insurance package that meets your construction company’s needs, which would not be considered?
a) property insurance
b) liability insurance
c) workers’ compensation policy
d) umbrella policy

d) umbrella policy

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Where must the supplier’s MSDS sheets be kept?
a) at the office
b) at the job site
c) they should be discarded
d) in a file cabinet

b) at the job site

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If you find that you are not getting work because your bids are too high, you should try:
a) lowering your fixed expenses
b) using a standard 10% overhead figure
c) hiring lower wage employees
d) working for time and materials

a) lowering your fixed expenses

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A job calls for the demolition of an old residence in order for a new residence to be built. Which of the following should be done? a) Call a demolition subcontractor to remove any suspected asbestos before the inspector arrives. b) Demolish the building regardless of asbestos. c) Remove any asbestos yourself, then demolish the building. d) Call an asbestos abatement contractor to check for asbestos.

d) Call an asbestos abatement contractor to check for asbestos

What kind of information tells you if you are able to pay off your bills? a) net current assets b) current liability c) net working capital d) income statement

c) net working capital

Which type of bond insures that the contractor will pay all labor and material bills and fulfill the terms of the contract? a) Performance Bond b) Contract Bond c) Materials Bond d) Bid Bond

b) Contract Bond

Why should a contractor visit the work site frequently? a) To keep the subcontractors informed of the job's progress and to check on what materials must be ordered for the next phase of construction. b) To know when to schedule final payment. c) To know when to schedule float time. d) To keep the owner informed of the job's progress and to check on what materials must be ordered for the next phase of construction.

a) To keep the subcontractors informed of the job's progress and to check on what materials must be ordered for the next phase of construction.

Which of the following muscles should be used more when lifting heavy materials? a) back c) shoulders b) arms d) legs

d) legs

Contractors should keep good business records: a) for insurance purposes. b) to monitor the change in costs over a five-year period. c) to determine if the business is making a profit. d) in case the IRS audits them.

c) to determine if the business is making a profit.

If a contractor has a bad set of plans, he or she should: a) talk to the owner and see if you can get a better set of plans b) reject the job c) do the job anyway d) talk to an architect

a) talk to the owner and see if you can get a better set of plans

Federal regulations on overtime apply to: a) piece work b) hourly employees c) salaried employees d) all of the above

d) all of the above

Which of the following are the best examples of fixed costs? a) advertising, office supplies, equipment maintenance b) rent, truck payment, insurance c) mortgage, fuel, utilities d) rent, utilities, equipment maintenance

b) rent, truck payment, insurance

What is the deadline for filing this year's employee W-2s with the Social Security Administration? a) January 1 b) April 15 c) July 1 d) February 28

d) February 28

What information must employees have to pass a job evaluation? a) The results of a health examination. b) How to safely use tools on the jobsite. c) They must have a detailed job description. d) How to perform CPR

c) They must have a detailed job description.

When an employee who is not hired for a specified period quits, the employee must be paid: a) immediately b) half immediately with the balance due within 30 days c) within 5 days of quitting d) never

a) immediately

If an employee is 20 minutes late for work, the employer may: a) deduct an hour's wage b) deduct for 20 minutes only c) deduct a half hour's wage d) not deduct from wages

c) deduct a half hour's wage

A schedule of payments in a home improvement contract must include which of the following details? a) amount of each payment as a sum in dollars and cents b) specific reference to the amount of work and services to be performed c) specific reference to the materials and equipment to be supplied d) all of the above

d) all of the above

A small contractor with no employees is working out of his garage. Which of the following types of insurance is not necessary at this time? a) property damage b) workers' comp c) general liability d) commercial vehicle

b) workers' comp

A home improvement salesperson's registration must be renewed: a) for every job. b) every two years. c) once per year. d) every four years.

b) every two years.

To prevent cash flow problems at the end of a construction project, the contractor should: a) order all materials before beginning work. b) seriously consider changing the payment schedule. c) obtain a line of credit from a bank. d) ask the owner to make payments before they are due.

c) obtain a line of credit from a bank.

Which of the following must be included in a home improvement contract? a) schedule of payments b) project name c) job specifications d) exact dates of job duration

a) schedule of payments

Which of the following is least important in preparing a bid for a home construction project? a) cost of materials b) cost of permits c) cost of labor d) overhead and profit

b) cost of permits

When it comes to liens: a) subcontractors cannot file a lien. b) the owner is responsible for paying for the work of improvement. c) you can file a lien at any time. d) suppliers cannot file a lien.

b) the owner is responsible for paying for the work of improvement.

Which of the following is not considered overhead? a) rent b) utilities c) storage d) advertising

c) storage

A payment bond would be posted by the: a) prime contractor or subcontractor. b) prime contractor or subcontractor. c) prime contractor or property owner d) property owner or material supplier

c) prime contractor or property owner

Which of the following statements about the State safety code is correct? a) It is a complete code that adopts portions of local codes. b) It is a complete code that adopts all local codes. c) It is the only code you must consult. d) It has been stable for several years.

d) It has been stable for several years.

A general contractor with a general building license wants to form a corporation with two specialty contractors - one has a C-10 license and the other a C-36. The new corporation should: a) be licensed in the general building classification only. b) be licensed in the C-10 and C-36 classifications only. c) obtain a special license from the CSLB d) be licensed in all three license classifications.

d) be licensed in all three license classifications.

Fixed costs apply to which of the following categories? a) direct costs b) overhead c) travel expenses d) labor

b) overhead

How many times may the qualifying individual take the State license exam before the application is voided? a) as many times as necessary within 18 months b) once c) twice d) three times

a) as many times as necessary within 18 months

Which of the following components of a bid would be considered nonproductive? a) allowance for breakfast and lunch at a remote jobsite b) equipment purchased for job c) surface preparation for painting d) travel time

a) allowance for breakfast and lunch at a remote jobsite

What is the maximum penalty for working as a contractor with a license that has been revoked, suspended, or has lapsed? a) 3 years probation b) 6 months in jail and $15,000 fine c) 1 year in jail d) 3 years in prison

b) 6 months in jail and $15,000 fine

How many employees must an employer have before she must make disability insurance deductions? a) 0 b) 2 or more c) 1 or more d) 35 or more within a 25 mile radius

c) 1 or more

By law, the maximum hours in a day a minor may work is: a) 4 b) 6 c) 7.5 d) 8

d) 8

On a job site, a Cal/OSHA inspector discovers a piece of equipment that is hazardous. A temporary variance may be granted a) if the equipment was recently repaired b) if the equipment is new and can be fixed before use c) if the equipment can be repaired on-site d) if the equipment can be recycled

b) if the equipment is new and can be fixed before use

The prime contractor must pay the subcontractor within how many days after receiving a progress payment? a) 6 days b) 7 days c) 10 days d) 20 days

c) 10 days

What is the maximum number of hours a minor can work on the day before a school day? a) 4 b) 5 c) 7.5 d) 8

d) 8

Which of the following is the most important factor with respect to a schedule of payments? a) date b) keeping lender informed of job progress c) amount d) phase

c) amount

What precautions must the contractor take with hazardous substances? a) The contractor must adopt a Code of Safe Practices that relates to work at each job site. b) Each employee must sign a sheet stating that he or she understands the safety and health risks. c) You must hang a safety poster in an area near the time clock. d) You should make every employee wear a dust mask.

a) The contractor must adopt a Code of Safe Practices that relates to work at each job site.

If retention is withheld until substantial completion of the entire job, the subs who worked on the early stages of the project can be put at a financial disadvantage. What is the best way to remedy this situation? a) Pay the subs when they finish, no matter what. b) Tie the release of proportional retentions to the completion of the sub's work rather than the entire job. c) Contact the owner immediately. d) None of the above.

b) Tie the release of proportional retentions to the completion of the sub's work rather than the entire job.

By law, the maximum hours in a week a minor may work is: a) 30 b) 32 c) 35 d) 40

d) 40

Which agency would you contact when changing the location of a driveway on private property? a) local building department b) county c) state d) national

a) local building department

What is the best time to talk to a client about liens and stop notices? a) 3 days after the job starts b) 20 days after the job starts c) before the job starts d) 30 days after the job starts

c) before the job starts

In Small Claims Court, if you want to be represented by an attorney (lawyer): a) the attorney must remain quiet except when consulting. b) you cannot consult with attorney in Small Claims Court. c) you are limited to one attorney. d) the attorney is limited to 10 minutes of bench time.

b) you cannot consult with attorney in Small Claims Court.

How could a cash flow problem best be prevented? a) Each payment should relate to a definite stage of the project. b) Contract should specify 10% down and 80% along the way with a 10% retention. c) Owner should pay in full at the start of the job. d) Owner should pay 50% of total contract at start of the job.

a) Each payment should relate to a definite stage of the project.

Which of the following is not a misdemeanor? a) A home improvement salesperson failed to disclose the name of the contractor on a home improvement contract form. b) A home improvement salesperson gave a homeowner $20 for each new customer the homeowner referred to the salesperson. c) A home improvement salesperson gave a prospective customer an unconditional gift valued at $5 as part as part of a sales promotion. d) A home improvement salesperson failed to give the contractor a $50 down payment the salesperson received from the customer.

c) A home improvement salesperson gave a prospective customer an unconditional gift valued at $5 as part as part of a sales promotion.

The best two methods of keeping track of job expenses are: a) payroll journal and expense journal b) general ledger and payroll journal c) expense journal and general ledger d) general journal and general ledger

a) payroll journal and expense journal

Is Form 1099-MISC required for a corporation that provided $600 in services as an independent contractor during the calendar year? a) Yes. A 1099 is required because the corporation is an independent contractor that was paid $600 or more. b) No. A 1099 is not required for a corporation. c) No. A 1099 is not required unless an independent contractor is paid over $1,000 in a calendar year. d) Yes. A 1099 is required for individuals and corporations.

b) No. A 1099 is not required for a corporation.

What is the maximum penalty for a contractor convicted of price-gouging during a declared state of emergency? a) permanent license revocation by CSLB b) $10,000 fine c) 1 year in jail d) all of the above

d) all of the above

Which of the following is/are grounds for a disciplinary action? a) failure to provide the owner with a Notice to Owner b) failure to pay employees after being paid by the owner c) failure to complete a project for the price in contract d) any of the above

d) any of the above

Which of the following should be specified in a contract? a) Owner must pay for materials after they are installed. b) Owner must deliver the materials to the job site. c) Owner must pay after the job is completed. d) Owner must pay for materials after they are delivered.

d) Owner must pay for materials after they are delivered.

What is a likely penalty for contracting for jobs with an inactive license? a) permanent revocation of license b) fine and/or license suspension for up to one year c) fine, one-year license suspension, and a minimum of six months in jail d) temporary suspension of license only

b) fine and/or license suspension for up to one year

On a large job, what is the best way to make an efficient schedule? a) critical path method (CPM) b) bar chart c) follow your punch list d) any of the above

a) critical path method (CPM)

A payment bond guarantees that the bonding company will pay valid claims for unpaid bills owed by the ____________ posting the bond. a) prime contractor or subcontractor b) subcontractor or material supplier c) property owner or material supplier d) prime contractor or property owner

d) prime contractor or property owner

What is a relatively simple way to figure overhead and profit (OH&P) for a bid? a) use the industry standard b) check the profit and loss (P&L) statements for jobs of similar size c) average the OH&P on jobs for the previous month d) review OH&P and contracts for the past year

b) check the profit and loss (P&L) statements for jobs of similar size

What is the biggest problem facing new contractors when trying to obtain a performance or bid bond? a) they don't have a broker b) poor credit c) no prior track record d) none of the above

c) no prior track record

A contractor sues an owner for refusing to make final payment after the job was completed. The owner is demanding changes. What could the contractor have done to prevent the lawsuit? a) The contractor could have walked the job with the owner and had the owner sign a job completion form. b) The contractor could have asked the workers to testify. c) The contractor could have just walked the job with the owner. d) All of the above.

a) The contractor could have walked the job with the owner and had the owner sign a job completion form.

When a dispute over an alleged violation is referred to arbitration, the CSLB Registrar looks for: a) licensee has 2 or less violations in past 10 years. b) all parties have agreed to private arbitration. c) license in good standing at time of alleged violation. d) amount of damage is over $50,000.

c) license in good standing at time of alleged violation.

If you notice that the plans do not specify a fireproof door where one is required, you should: a) talk to the owner b) fix it yourself c) report it to the architect d) install the door and bill the client

c) report it to the architect

A licensed contractor wants to work with a person who is not licensed. Of the following, which is a legal alternative? a) They could form a corporation and obtain a corporate contractor's license. b) They could work as partners if the licensed contractor signs all of the contracts. c) They should apply for a sole proprietorship contractor's license. d) They could obtain a joint venture contractor's license.

a) They could form a corporation and obtain a corporate contractor's license.

Why would there be a difference between the actual inventory and the inventory shown on paper? a) You always underestimate what you have in inventory. b) You calculated what you have in inventory by subtracting only what goes into the finished product. c) There never is a substantial difference. d) It is a common occurrence because of factors such as theft, natural loss, and mistakes.

d) It is a common occurrence because of factors such as theft, natural loss, and mistakes.

When demolishing a three-story structure, which agency would you contact first? a) state b) county c) local building department d) national

c) local building department

When applying for a permit to re-install wiring that has been removed from an old Victorian house, the minimum license needed is: a) general contractor's license b) specialty electrical license c) re-modeler's license d) no specific license is required

b) specialty electrical license

Which of the following is a true statement about payroll taxes? a) All wages are subject to taxation. b) Bartered goods are not subject to taxes. c) Bonuses are not subject to taxes. d) Payroll taxes must be paid only once a year.

a) All wages are subject to taxation.

How many employees must an employer have before he must apply for workers compensation insurance? a) 0 b) 1 or more c) 2 or more d) 12 or more within a 35 mile radius

b) 1 or more

When is a worker considered an employee rather than an independent contractor? a) When the employer has direct control over the work being performed. b) When the employer has the right to tell the worker to do certain work. c) When the worker can make a profit or loss on the work. d) When the worker doesn't set his own hours.

a) When the employer has direct control over the work being performed.

When spraying toxic materials, which of the following safety equipment must be worn? a) hooded suit b) safety goggles c) respirator specifically designed for that material d) none, toxic materials should never be sprayed

c) respirator specifically designed for that material

If a contractor fails to pay workers, they can place a lien on a house, and the contractor may face a disciplinary action. Why is this also a problem for an owner who has already paid the contractor for all completed labor? a) the rest of the job might not be completed b) the owner might still legally owe the workers c) the house can be sold by a sheriff to pay the workers d) all of the above

d) all of the above

Of the following, who can benefit from a mechanics' lien? a) architects and subcontractors b) manufacturers of construction materials and subcontractors c) manufacturers of construction materials and clients d) clients and subcontractors

a) architects and subcontractors

You have determined that the job you are working on involves asbestos. What should you do? a) Stop work immediately. b) File for an Asbestos Abatement certificate c) Register with DOSH. d) Remove any asbestos and keep working.

a) Stop work immediately.

What should construction employees wear when working at night? a) dark-colored jackets b) light sticks on strings around their necks c) night vision goggles d) bright-colored vests

d) bright-colored vests

When a contractor is bidding a job, which of the following is the biggest risk factor? a) change orders b) small extras c) finding subs d) owner's financial stability

d) owner's financial stability

Where would a contractor go to verify that building permits were issued for all construction work done on a house? a) State Department of Housing b) OSHA c) agency that granted initial permit d) County Recorder's office

c) agency that granted initial permit

Which of the following would qualify a person as an "independent contractor"? a) doesn't punch a time clock b) works at home c) can make a profit or loss on work d) only works on small jobs

c) can make a profit or loss on work

Your workers' comp insurance policy lapsed two weeks ago. You mailed the check yesterday, and today one of your employees is injured on the job. Which of the following statements is true? a) You are not covered because the policy lapsed. b) You are covered because you mailed a check. c) You are covered because the injury occurred within 30 days of the lapse of coverage. d) You are not covered because the injury occurred after the two-week grace period.

a) You are not covered because the policy lapsed.

When does it make the most sense for a contractor to finance a job? a) When it is an emergency situation, and the owner cannot get the money soon enough. b) When he will not get the job otherwise c) When the owner will go to a competitor otherwise d) When the owner has previous bankruptcies and cannot get credit

a) When it is an emergency situation, and the owner cannot get the money soon enough.

When can a contractor accept a job where the owner does not have a pre-approved loan? a) When the owner has bad credit. b) When there is an emergency situation and the owner has a high income and good credit. c) When the owner has an amount in the bank equal to the contract cost. d) When the owner seems kind and has an honest reputation

b) When there is an emergency situation and the owner has a high income and good credit.

Who is responsible for having the job ready for the inspector? a) owner b) architect c) foreman d) contractor

d) contractor

If an employee is fired as a result of a garnishment, he must notify _____ within _____ days, if he intends to file a claim disputing lost wages following the firing. . a) employer ... 60 b) employer ... 30 c) Labor Commissioner ... 30 d) Labor Commissioner ... 60

b) employer ... 30

A client requests a bid package from a contractor. The package should include: a) a certificate from the Building Standards Safety Department b) a list of all subcontractors c) a copy of the contractors license d) a list of references for the contractor

b) a list of all subcontractors