CSLB Contractor's Law practice test Part 2 questions with correct answers, Exams of Management Accounting

Download CSLB Contractor's Law practice test Part 2 questions with correct answers and more Exams Management Accounting in PDF only on Docsity! CSLB Contractor's Law practice test Part 2 questions with correct answers When should you let your attorney see a construction contract? A. Before you let the client see the contract B. After the contract is prepared but before you sign it C. After the building permit is obtained D. After the contract is signed by you and the client CORRECT ANSWER B. After the contract is prepared but before you sign it Which is the most correct statement as to what must be included in every home improvement contract? A. Notice of right to cancel B. Contractor's license number C. Truth-in-lending notice D. Name of the project CORRECT ANSWER B. Contractor's license number Which is NOT required on a home improvement contract? A. A notice, in at least 10 point print, in close proximity to the signature, and a statement that the owner has a right to require a performance and payment bond B. The name and home address of all the personnel listed on the license C. An approximate date when work will begin and be substantially completed D. A description of the work to be done and materials and equipment to be used or installed CORRECT ANSWER B. The name and home address of all the personnel listed on the license. Know that A, C and D are required. Only the contractor's name, address and license number are required. When a home improvement contract is signed, the contractor must substantially begin work within ____ days of the date specified in the contract? A. 5 B. 10 C. 15 D. 20 CORRECT ANSWER D. 20 Which is true concerning home improvement sales persons? A. They must register with the Registrar's office and may work for only one contractor at a time B. Anyone who sells home improvement contracts for a licensed contractor outside the contractor's normal place of business is required to be registered with the Attorney General's office C. They must be at least 18 years of age. There are no residency or educational requirements D. They may begin to negotiate home improvement contracts as soon as they have filled out the appropriate application and paid the required fees CORRECT ANSWER C. They must be at least 18 years of age. There are no residency or educational requirements - must register for "each" contractor with the Registrar and receive a registration number first Judy, a contractor, employs Sam as her registered home improvement salesperson. Sam meets with Mr. And Mrs. Jones and negotiates home improvement work that totals $350. When Sam returns to his boss and tells her of the verbal contract, his employer says she will not work for the contracted price. The Contractor's License Law states: A. The contractor is required by law to abide by the verbal agreement since verbal home improvement contracts under $500 are binding B. The contractor is not bound by a verbal agreement D. It is controlled by the Contractor's State License Board CORRECT ANSWER D. It is controlled by the Contractor's State License Board Who must sign a joint-control addendum to a home improvement contract? A. Contractor's only B. Owner and contractor C. Owner, contractor and Notary Public D. Owner,contractor and joint control officer CORRECT ANSWER D. Owner,contractor and joint control officer When a joint-control addendum is issued, which of the following does NOT have to be included in a home improvement contract? A. Owner's signature B. Schedule of payments C. Notice to owner D. License number of the contractor CORRECT ANSWER B. Schedule of payments Which of the following is true concerning surety bonds? A. They are required in order to obtain a contractor's license number B. They are valued at $7500 for all contractor's C. They are required in case you accidentally damage the customer's property D. All of the above CORRECT ANSWER A. They are required in order to obtain a contractor's license number -Bonds do not cover damage Of the following, who will NOT stand to benefit from a contractor's bond? A. Any client damaged as a result of regulation violations by the contractor B. Any person damaged due to fraud on the part of the contractor C. Any subcontractor damaged due to an accident D. Any employee damaged by the contractor's failure to pay wages CORRECT ANSWER C. Any subcontractor damaged due to an accident Which of the following is NOT eligible to receive benefits from a contractor's license bond? A. A customer who was defrauded by the contractor B. A subcontractor involved in an accident on the job site C. An employee who was not paid wages that where due D. A homeowner with a valid claim that the contractor abandoned the job CORRECT ANSWER B. A subcontractor involved in an accident on the job site Which bond guarantees that a contractor's work will be free of defects in material and workmanship for a specific period of time? A. Performance bond B. Licensure bond C. Satisfaction bond D. Maintenance bond CORRECT ANSWER D. Maintenance bond Match the correct bond with what it does? A. Performance bonds guarantee the project is completed according to plans and specs B. Payment bonds guarantee payment of all labor and material C. Contract bonds guarantee both job completion and payment of all labor and material D. All of the above are true CORRECT ANSWER D. All of the above are true For most contractor's, the required bond needed to obtain a contractor's license is: A. $2,500 B. $5,000 C. $7,500 D. $12,500 CORRECT ANSWER D. $12,500 What would the Contractor License Board NOT accept as an alternative to filing a license bond? A. Cash deposit B. Certificate of deposit C. U.S. Government bearer-bond D. Blue chip stocks CORRECT ANSWER D. Blue chip stocks Bonds are often required on larger jobs. A bond company will charge approximately ____ % of its fee based on the contract price. A. 1 - 2 B. 10 C. 15 D. 20 CORRECT ANSWER A. 1 - 2 Where would a contractor obtain a surety bond? A. Bank B. Credit Union C. Insurance agent D. Contractor's State License Board CORRECT ANSWER C. Insurance agent When must a contractor show proof of licensure? A. When the contractor sends advertisements in the mail B. In each county or city when pulling permits C. Only when asked by an inspector or other government official D. When you go to a customer's house CORRECT ANSWER B. In each county or city when pulling permits If a contractor forgets to renew his or her license on time, the expired license may be renewed anytime within ____ after its expiration without reapplying for a license and fulfilling the exam or waiver requirements again. A. 1 year B. 2 years C. 3 years D. 5 years CORRECT ANSWER D. 5 years Which is NOT a requirement to renew your license? A. Be sure your bond is current and on file with the Contractors State License Board B. Return the renewal notice with the appropriate fees C. Notify the Registrar's office of the name of your worker's compensation insurance company if you have employees D. Repeat the open book asbestos exam CORRECT ANSWER D. Repeat the open book asbestos exam Harry and Linda have done business as a licensed partnership. If Linda is a general partner, but not qualified, what must she do to get an individual license? A. If Linda was listed as a partner on the license and was actively engaged in the business for at least five of the past seven years, she may apply for a waiver of the exam B. If Linda applies for an individual license, the partnership license must be inactivated C. Linda is not entitled to apply for an individual license D. General partners may automatically receive an individual license if they are listed on the partnership license CORRECT ANSWER A. If Linda was listed as a partner on the license and was actively engaged in the business for at least five of the past seven years, she may apply for a waiver of the exam The qualifying RME for a construction firm must work at least: A. 32 hours per week or 80% of the work week B. 30 hours per week or 70% of the work week C. 24 hours per week or 65% of the work week D. 12 hours per week or 51% of the work week CORRECT ANSWER A. 32 hours per week or 80% of the work week How many companies can an RME qualify at one time? A. Only one B. Two C. Three D. As many as he is able CORRECT ANSWER A. Only one Jim wishes to qualify for more than one active license at a time. According to the Contractors' License Law, he must own at least _____ of the equity for each business where he serves as the qualifying individual. A. 5% B. 20% C. 50% D. 100% CORRECT ANSWER B. 20% -Maximum of 3 Bob Smith is the RME of XYZ Construction Co., where he works all week. His own construction business, under a different name and license number, builds a deck on weekends. Is this an acceptable practice for Bob? A. Yes, Bob may qualify as many licenses as he desires B. Yes, as long as he works more than 32 hours as an RME C. No, Bob must take another qualifying exam for the second license D. No, Bob may qualify only XYZ Co.'s license in this case CORRECT ANSWER D. No, Bob may qualify only XYZ Co.'s license in this case - An RME may qualify only one company Where must a contractor include the "Notice to Owner"? A. In all home improvement contracts B. In all home improvement contracts over $500 C. In all contracts for government projects D. In home solicitation contracts only CORRECT ANSWER B. In all home improvement contracts over $500 The Notice to Owner is given to inform the owner: A. When work will begin and end B. That you are going to improve the property C. Know the property can be liened D. Know that a lien has been filed CORRECT ANSWER C. Know the property can be liened B. Is used on public and private jobs C. Must be delivered to the owner personally or left at the owner's residence with some person in charge or delivered to the architect D. All of the above CORRECT ANSWER D. All of the above 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 sub has not been paid by the prime B. Inform the owner that the property will be liened C. Notify the owner that a lien will be filed D. Notify the owner that the sub has completed his or her part of the job CORRECT ANSWER A. Inform the owner that the sub has not been paid by the primer A Stop Notice is the only single means to force payment on a public-works job. You must not lien public property, so in the event a contractor needs to serve a Stop Notice on a public-works job, he should serve it to the: A. Lender B. Prime contractor C. Awarding authority D. Division of Payments CORRECT ANSWER C. Awarding authority - Remember only subs use the stop notice If a Stop Notice is given on a private home construction job, it is given to the lender with a bond in the amount of: A. 1 - 1/4 times the amount of the actual claim B. 10% of the amount of the claim C. $7,500 D. 1 - 1/2 times the amount of the actual claim CORRECT ANSWER A. 1 - 1/4 times the amount of the actual claim Mr. Garcia learns that a lien has been placed on his property. He believes that the lien is invalid and unfairly clouding the title of his home. How can he release the property from the lien? A. A waiver-release bond can be issued if Mr. Garcia pays the premium B. He can purchase a bond in the amount of one and a half times the amount of the lien C. There is nothing he can do D. His only recourse is to go to court CORRECT ANSWER B. He can purchase a bond in the amount of one and a half times the amount of the lien - The owner is substituting the bond as security to replace the lien If a contractor commits a serious violation of the contractor's laws, the Registrar can: A. Require the contractor to make restitution to the owner B. Require the contractor to correct the project C. Fine the contractor up to $2000 D. All of the above CORRECT ANSWER D. All of the above All of the following are causes for disciplinary action EXCEPT: A. Allowing your license to be used by any unlicensed contractor B. Entering into a contract with a contractor who is not licensed C. During bankruptcy, settling obligations, incurred as a contractor, for less than the full amount owed D. Willful, deliberate failure to pay suppliers when they are due CORRECT ANSWER C. During bankruptcy, settling obligations, incurred as a contractor, for less than the full amount owed