Vocabulary

Question 1

Arbitration Program

Answer 1

An informal process in which the people in conflict agree to let a neutral third person or panel make a final decision in a dispute among them

Question 2

Accusation

Answer 2

A public, written statement of charges CSLB has filed with the Office of the Attorney General that specifies statutes and rules a contractor or home improvement salesperson is alleged to have violated. It may result in a hearing to determine whether a licensee has violated the law and whether the license should be revoked, suspended, and/or placed under some type of restriction by the Registrar.

Question 3

Association Date

Answer 3

The date a person is added to a license

Question 4

Certificate of Insurance

Answer 4

A certificate issued by a contractor’s insurance company and submitted to CSLB as proof of workers’ compensation insurance coverage for employees.

Question 5

Classification

Answer 5

Refers to the type of trade work a contractor may perform, for example, plumbing, electrical, etc. (CSLB has 43 license classifications.)

Question 6

Disassociation Date

Answer 6

The date a person is removed as a member of the personnel of record on a license

Question 7

Owner-builder

Answer 7

Any individual, or group of individuals, who own the property on which they plan to construct, alter, repair, improve, or remodel a building or structure

Question 8

Qualifying Individual

Answer 8

The individual who meets the experience and examination requirements for a license (Every active license must have a designated qualifier.)

Question 9

Sole Ownership

Answer 9

The type of license issued to an individual

Question 10

Apparent Power

Answer 10

Total power in an AC circuit, both dissipated and absorbed/returned is referred to as apparent power. Apparent power is symbolized by the letter S and is measured in the unit of Volt-Amps (VA).

Question 11

True Power

Answer 11

Power dissipated by a load is referred to as true power. True power is symbolized by the letter P and is measured in the unit of Watts (W)

Question 12

Reactive Power

Answer 12

Power merely absorbed and returned in load due to its reactive properties is referred to as reactive power. Reactive power is symbolized by the letter Q and is measured in the unit of Volt-Amps-Reactive (VAR)

Question 13

Inductive Reactance

Answer 13

Inductive reactance is an opposition to the change of current through an element.

Question 14

Capacitive Reactance

Answer 14

Capacitive reactance is an opposition to the change of voltage across an element.

Question 15

Quick Ratio

Answer 15

The quick ratio is a financial ratio used to gauge a company’s liquidity. The quick ratio is also known as the acid test ratio. The quick ratio differs from the current ratio in that some current assets are excluded from the quick ratio. The most significant current asset that is excluded is inventory.

Question 16

Umbrella Insurance

Answer 16

Umbrella insurance refers to liability insurance that is in excess of specified other policies and also potentially primary insurance for losses not covered by the other policies.

Question 17

FUTA

Answer 17

The Federal Unemployment Tax Act (or FUTA, I.R.C. ch. 23[dead link]) is a United States federal law that imposes a federal employer tax used to help fund state workforce agencies. Employers report this tax by filing an annual Form 940 with the Internal Revenue Service. In some cases, the employer is required to pay the tax in installments during the tax year.

Question 18

FICA

Answer 18

Federal Insurance Contributions Act (FICA) tax /ˈfaɪkə/ is a United States federal payroll (or employment) tax imposed on both employees and employers to fund Social Security and Medicare—federal programs that provide benefits for retirees, the disabled, and children of deceased workers.

Question 19

Retention

Answer 19

Retention is a percentage (often 5%) of the amount certified as due to the contractor on an interim certificate, that is deducted from the amount due and retained by the client. The purpose of retention is to ensure that the contractor properly completes the activities required of them under the contract. Retention can also be applied to nominated sub-contractors, and the main contractor may also apply retention to domestic sub-contractors. In most contracts retention can be held up to 60 days.

Question 20

Depreciation

Answer 20

Depreciation is an income tax deduction that allows a taxpayer to recover the cost or other basis of certain property. It is an annual allowance for the wear and tear, deterioration, or obsolescence of the property.

Question 21

Escrow Account

Answer 21

An escrow account is an account that temporarily holds funds for other parties, primarily for real estate purposes – although other transactions may require an escrow account as well. An escrow company is a neutral third party that temporarily holds the funds, which are disbursed when specific terms and conditions have been met.

Question 22

Income Statement

Answer 22

‘Income Statement’ A financial statement that measures a company’s financial performance over a specific accounting period. Financial performance is assessed by giving a summary of how the business incurs its revenues and expenses through both operating and non-operating activities.

Question 23

Bid Bond

Answer 23

A bid bond is issued as part of a supply bidding process by the contractor to the project owner, to in hopes guarantee that the winning bidder will undertake the contract under the terms at which they bid.

Question 24

Current Ratio

Answer 24

The ratio is mainly used to give an idea of the company’s ability to pay back its short-term liabilities (debt and payables) with its short-term assets (cash, inventory, receivables). The higher the current ratio, the more capable the company is of paying its obligations. A ratio under 1 suggests that the company would be unable to pay off its obligations if they came due at that point.

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Question 25

Balance Sheet

Answer 25

A balance sheet is a statement of the assets, liabilities, and capital of a business or other organization at a particular point in time, detailing the balance of income and expenditure over the preceding period.