California Contractors License Test: Exam Preparation Guide, Exams of Law

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California Contractors License Test

Class Questions

Who does not need a contractors License? - Answer- someone who does certain construction on commercial agricultural property The contractor surety Bond necessary for most contractors to obtain their license is in the amount of - Answer- $15, When licensed as a Sole Proprietor the license belongs to - Answer- the Company Which is true of an inactive license? - Answer- Must be renewed every 4 Years How many classifications can an RME apply for? - Answer- As many classifications as he or she can qualify for. A prime contractor shall pay his or her subcontractors - Answer- within 7 days of receipt of each progress payment A contractor wants to use a fictitious name as a business name style. When does the fictitious name statement needed to be filed? - Answer- Before conducting Business During a declared state of emergency how much may a contractor increase his prices? - Answer- 10%above the price just prior to the declared state of emergency. If John Burroughs the sole proprietor of a pluming company is applying for a license as am individual, which of the following name styles is not permitted? - Answer- permitted: John Burroughs Burroughs Plumbing Co. J.B. Co. Not-Permitted: John Burroughs Inc. Active licenses must be registered every------ and inactive licenses should be registered every----- - Answer- 2 years, 4 years After you pass the state license test what should you do in order to receive an active license number? - Answer- Pay your registration fees. Submit a complete asbestos open book examination. Show proof of workers comp insurance or submit a waiver of workers comp and submit your "pass" letter.

Which of the following may qualify for more than one contractors license? - Answer- Sole proprietor. How many classifications may a qualifier add to a license? - Answer- As many qualifications as he qualifies for. which of the following may be protected by a Contract Bond? - Answer- -A client damaged by the contractors violation of the contract. -Any person damaged by contractor fraud -Any contractor damaged by contractors failure to pay wages. What is the best way for the homeowner to protect his property from having a lien placed on his property, when signing a Home improvement contract. - Answer- Require the Prime Contractor to Supply a performance and Payment Bond. CSLB established the State Wide Investigative Fraud Team (SWIFT). CSLB'S SWIFT has the authority to: - Answer- Cite those not properly licensed Which is not part of the Home Improvement Contract? - Answer- Preliminary Notice What us the purpose of the Preliminary Notice? - Answer- Assert Mechanic Liens and Stop notice Rights Preliminary Notices are filed? - Answer- within 20 days from first furnishing labor or materials. Which of the following is the most important practices to follow when trying to avoid disagreements with an owner? - Answer- Be sure to include a detailed description of the project and everything that is to be done in the contract. Why should a contractor keep a record of all Change Orders? - Answer- State law Requires It Which of the following people file a Stop Notice? - Answer- a subcontractor contracted to do specialty trade and was not paid. Who signs a "Joint Control Agreement"? - Answer- The lender, the property owner and the Prime Contractor. How long will the CSLB hold a contractor responsible for observable defects? - Answer- 4 years The CSLB offers a free voluntary arbitration program for disputes alleged damages: - Answer- Between $15,000 and $50,

If a contractor includes provision in a contract for use of private arbitration and a dispute between the owner and the contractor makes an arbitration necessary, who will bare the cost of a private arbitrator? - Answer- The Owner and contractor will slit the cost of the arbitration. If a contractor provides the owner with a 10-year written warranty covering a patio cover he has installed, and the cover begins to deteriorate after 5 years of being installed which is true? - Answer- the state will hold the contractor liable for the entire term of the written warranty. Who is responsible for providing the owner a copy of the "Notice of Cancellation"? - Answer- The Prime Contractor In which of the following circumstances must you provide your license number? - Answer- All contracts, all Advertising, All preliminary Notices. Who is responsible for determining when the project is complete? - Answer- The owner/ his Agent Stop Notices are Bonder for - Answer- 1 & 1/4 the amount of the claim In drawing up "Home Improvement Contracts," contractors should pay attention to the requirements of print typeface and point size of the notices and disclosures. Unless a larger typeface is specified in the law (Business and professions Code) text in any printed form should be: - Answer- 10-pt Typeface and the headers should be at least 10-pt Boldface The costs of running your business including office expenses etc, is called: - Answer- Overhead expenses Direct Labor is compromised of: - Answer- cost for labor and payroll taxes Which of the following is an asset in the Balance sheet? - Answer- Accounts Receivable Direct Costs Consist of: - Answer- Direct Labor, Direct labor burden, direct materials and other direct costs. Good Cash Flow is achieved when: - Answer- current liabilities are less than current assets Equity is: - Answer- Total assets less total liabilities Networking Capital is: - Answer- the difference between current assets and current liabilities

A contractor is preparing a bid for repairs and the contractor estimates his direct costs to b $1,000. the contractor knows that his overhead is 25% and the contractor wants a 5% profit the contractor should submit a bid for: - Answer- $1,428.57 (1,000/.70) a contractor estimates labor and materials to be $2,500. Allowing for 15% overhead and 5% profit. what should the total bid be? - Answer- $3,125 (2,500/.8) When business is bad which of the following - Answer- Bid on jobs only if you can make a profit Unresolved conflicts will result in extra costs and loss time for which of the following? - Answer- the client, contractor, and state. If you're working in a DIFICULT phase of a project and the owner comes to you with a complaint about the windows you have installed what do you do? - Answer- Stop what you are doing and deal with the owners complaint Subcontractors are selected on the basis of ------------. - Answer- their availability to perform the job well, on time and their cost. Which of the following best helps the contractor bring together materials and labor at the proper time? - Answer- Critical Path Method What is the advantage to always using the same method to calculate your bid? - Answer- it saves time If you are working on a CRITICAL phase of a project and the owner comes to you with a complaint about he windows you have installed, what do you do? - Answer- Acknowledge the complaint and tell the owner you'll be right with him as soon as you're finished with what you are working on.