Read each question completely as one word can change what they are looking for

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1 TEST TAKING TIPS Read each question completely as one word can change what they are looking for Determine only the facts of each question prior to reading the answers Eliminate two answers easily and quickly giving you a chance. Watch for key words: Must Not Shall in each question. Especially the word Not When taking the state exam they are asking you for the correct answer over and over and then all of a sudden they will insert the word Not Which means now they are looking for the wrong answer. Do not spend too much time on any one question. Answer the questions you know for sure first. Make sure you write down which ones you do not answer so you remember to return to them. Once you have answered all the questions you know for sure you may already have passed or very close to passing. The second time again eliminate two wrong answers and this time use what we refer to as Gut Feeling. What this means is you think Answer B is correct but you also think Answer C is correct. Always go with your first thought and pick that answer. In most cases you have passed however if you still have questions left and if the proctor tells you only a few minutes left do not leave any unanswered. University studies have shown that in mul tiple choice questions the most picked answers are either B or C. Example: You have 5 questions you just do not know and several accounting questions left and they say you have 3 minutes. At this point pick the letter B or the letter C and answer all remaining questions with the same answer. You will be guaranteed to get 25% correct. The state has a tendency to put new questions near the beginning so if you see something unfamiliar skip that question and two or three questions later you will notice the answer to that new question. If you need to memorize information such as dates write them down and when sitting outside the test center go over them several times then when you get inside make notes. Get a good night s rest prior to taking your exam You take the Law Exam the first 2 ½ hours and have a choice to see your score immediately or wait until you finish your trade. If you think that would throw you off if you did not pass you might want to wait until you have completed both sections. That is your call Corporate Headquarters: #1 California Contractors Exam Prep School For More Than 25 Years

2 1. The costs of running your business, including office expenses, etc., is called: a) Direct Costs. b) Overhead. c) A liability. d) Accrual. 2. Which government agency collects State Unemployment Tax? a) Employment Development Department. b) County Unemployment Office. c) Franchise Tax Board. d) Internal Revenue Service. 3. Who does NOT need a California Contractor s Sate License? a) Someone who repairs or maintains an air-conditioning unit or heat-pump unit. b) Someone who installs mobile-homes. c) Someone who digs wells on the property of others. d) Sale or installation of finished products that do not become a fixed part of the structure. (Becomes permanent part of the property). 4. Which of the following is NOT part of a Home-Improvement Contract? a) Mechanic s Lien Warning. b) Notice of Cancellation. c) Twenty-Day Preliminary Notice. d) All of the above. (Twenty-Day Preliminary Notice is a legal documents sent to owners; agents; prime contractors and lenders b subcontractors or other 3 rd. parties, to establish their lien rights.).

3 5. Prime Contractor must pay subcontractor when? a) 10-days after Prime-contractor received payment. b) When Prime-contractor receives the withheld retention monies. c) 30-days after completion. d) As soon as subcontractor completes the work. (Modifications; Performance; Payment: Payment to subcontractors. The prime contractor shall pay to his/hers subcontractors, within 10-days of receipt of each progress payment; failure to pay subcontractors is grounds for legal action and in-addition to disciplinary action.). 6. The Contractors Surety Bond is necessary for most contractors to obtain their license. The Contractors Surety Bond is in the amount of: a) $2, b) $7, c) $12, d) $25, How long will the California Contractors State License Board hold a contractor responsible for observable defects? a) 5-years. b) 4-years. c) 3-years. d) 2-years. 8. In which of the following circumstances must a licensed contractor provide their license number? a) On all contracts. b) On all advertising. c) On all 20-Day Preliminary Notices. d) All of the above. 9. How many classifications can a Responsible Managing Employee apply for? a) One. b) Two. c) None. d) As many as the Responsible Managing Employee can qualify for. (Classifications are what trades are listed on a License.).

4 10. If a contractor includes a provision in a contract for the use of private arbitration and a dispute between the owner and the contractor makes arbitration necessary, who will bear the cost of the private arbitration? a) The California Contractors License Board. b) The Property Owner. c) The Prime Contractor. d) The Property Owner and the Prime Contractor will split the cost of the private arbitration. 11. State Disability Insurance is paid by: a) Employees only. b) Employers only. c) Both employers and employees. d) Neither employers nor employees. 12. A contractor estimates labor and material costs for a job to be $2, Allowing for 15% overhead and an 18% profit, what should the total bid be? a) $3,222. b) $3,731. c) $3,018. d) $3,825. (Add the 15% overhead with the 18% profit which equals 33%; then take 100% minus ( ) 33% and you get 67%; then take the estimated labor and material costs of $2, and divide ( ) $2, by the 67% and your total bid answer is $3, ). 13. Who is responsible for determining when the project is complete? a) The Prime Contractor. b) The Building Inspector. c) The Sub-Contractor. d) The Owner or his/her Agent. 14. Which of the following need a California Contractor s License? a) A mill worker who constructs cabinets. b) A civil service repairman. c) An individual who installs, repairs, or monitors a fire alarm system. d) A pool supply company. (The key words are installs, and repairs, ).

5 15. Which of the following needs a California Contractor s License? a) Moving a mobile-home. b) Owner-builder. c) Registered Architect and/or Engineer. d) Installation of finished products that do not become a permanent fixture to the property. (Through the process of elimination / Owner-builder does not need a license. Registered architect and/or engineer are registered &licensed The Installation of finished products, for example dishwashers, free standing refrigerators and free standing cooking ranges are examples of finished product that do-not become permanent fixtures to the building or property.). 16. State Sales Tax and Use Taxes are collected from customers, then reported and sent to: a) Internal Revenue Service. b) Franchise Tax Board. c) State Board of Equalization. d) None of the above. 17. During a declared state of emergency how much may a contractor increase his/her prices? a) Contractor is not allowed to increase prices at all. b) 15% above the prices just prior to the declared state of emergency. c) As much as the client is willing to pay. d) 10% above the price just prior to the declared state emergency. 18. Which of the following would be protected by a Contract Bond? a) A client damaged by the contractor s violation of the contract. b) Any person damaged by contractor fraud. c) Any person damaged by a contractor s failure to pay wages. d) All of the above.

6 19. A Stop Notice is a? a) Lien on the funds. b) A notice to stop the work. c) A required legal notice that the Prime Contractor sends to the Property Owner, Agent, or Lender. d) None of the above. (A Stop Notice is a lien on the funds. The Owner or Lender are issued this notice to stop paying the Prime-Contractor till the Prime Contractor pays the Subcontractors their scheduled due payments.). 20. A new-hire will fill out an form to verify their employment eligibility status.. a) 1099 b) DE-1 c) US-99 d) I-9 (As required by the Immigration Reform and Control Act, all employees must complete Form I-9 to verify their employment eligibility status.). 21. If an employee quits, wages are due within hours. a) 24-hours. b) 48-hours. c) Immediately. d) 72-hours. 22. A strike is when % or more of the employees legally refuse to perform their work. a) 10. b) 25. c) 50. d) A lockout is when an employer refuses or more employees to work because of a dispute. a) 20. b) 15. c) 10. d) 5.

7 24. An employee who works weeks during a calendar year is eligible for FUTA. a) 4. b) 8. c) 16. d) 20. (FUTA = Federal Unemployment Tax Act. FUTA is paid by employer.). 25. Which of the following may qualify for more than one active California Contractors License? a) 10% Partner. b) Sole Proprietor. c) RME (Responsible Managing Employee). d) RMO (Responsible Managing Officer), with 15% ownership. (A qualifier must have 20% or more ownership to qualify for more than one license.). 26. Which is true of an inactive license? a) Is given to retired contractors. b) Must be renewed every 4-years. c) The contractor can only contract for jobs under $100. d) Is given to contractors who lose their license. 27. Which of the following is an asset on a Balance-Sheet. a) Accounts Receivable. b) Accounts Payable. c) Equity. d) Income. 28. DOSH issues permits for digging trenches ft or more deep. a) 24-feet. b) 12-feet. c) 6-feet. d) 5-feet. 29. Title 24 was updated between and to include the requirements of accesses for persons with disabilities. a) 1972 and b) 1968 and c) 1964 and d) 1960 and 1968.

8 30. If Robert, the Sole Proprietor of a painting company, applying for a license as an individual, which of the following name-styles is NOT permitted by the California State License Board? a) Robert Burroughs. b) Robert C. Burroughs Co. c) Burroughs Painting Co. d) Robert Burroughs, INC. (Name-styles can never mislead the public about your true business entity.). 31. Who is responsible for providing the homeowner a copy of the Notice of Cancellation? a) The Sub-Contractor. b) The Registrar of Contractors. c) The Prime Contractor. d) The Homeowner. (The Notice of Cancellation is part of the Home-Improvement Contract.). 32. Twenty-Day Preliminary Notices are filed within 20-days of: a) The day work ends. b) The day work begins. c) Scheduled date to begin work. d) The Contract date. (The 20-Day Notice is filed within 20-Days the work was started.). 33. If employer pays with check that bounces, wages will continue for up to days or until payment. a) 90-days b) 60-days c) 30-days d) 14-days. 34. Employers must report a serious injury within hours of learning of the incident. a) Two. b) Eight. c) Twelve. d) Twenty-four.

9 35. Access guidelines for persons with disabilities are found in Title of the CA Code of Regulations. a) Title 2. b) Title 8. c) Title 24. d) All of the above. (Title-24 of the CA Code of Regulations (CCRs). 36. Direct labor burden is comprised of: a) Payroll expenses. b) Expenses charged to overhead. c) Cost for labor and payroll taxes. d) Cost of payroll taxes, insurances and benefits. 37. By law, the maximum hours in a day a minor may work is: a) 6. b) 7. c) 8. d) 9. (This is the maximum for a non-school day. for school days, the maximum for 14- or 15-year olds is 3-hours and 4-hours for 16- and 17-year olds.). 38. A contractor must provide the homeowner who contracts for a home-improvement project with a? a) Mechanic s Lien Warning. b) List of material suppliers. c) Copy of all insurance documents. d) List of other projects completed. (Mechanic s Lien Warning is part of the Home-Improvement Contract.). 39. For which projects do you need a building permit? a) You always need a building permit. b) When it is a public works project. c) When it is required by the local building department. d) For projects valued over $

10 40. The BEST type of training for the California Contractors License Exams for me is: a) Live In-school Law Classes with Trade Home-study and Live Law Crash Course. b) Law and Business On-Line with Trade Home-study and Live Law Crash Course. c) Home-study program with Live Law Crash Course. d) Law and Trade On-line self-study program.