A contractor buys materials for a lump-sum construction contract and pays sales tax at purchase. What record should be retained?
Correct Answer
B) Tax-paid invoice.
Construction contractors should keep records supporting tax paid or tax owed on materials, depending on the transaction.
Why This Is the Correct Answer
Construction contractors should keep records supporting tax paid or tax owed on materials, depending on the transaction.
Why the Other Options Are Wrong
Option A: Cost-to-complete.
Cost-to-complete. belongs to a different file or record trail; it does not prove the sales and use tax records event.
Option C: Receivables aging.
Receivables aging. belongs to a different file or record trail; it does not prove the sales and use tax records event.
Option D: Bid cover sheet.
Bid cover sheet. belongs to a different file or record trail; it does not prove the sales and use tax records event.
Memory Technique
Sales And Use proof for Organizing Purchase: event, approval, receipt, follow-up.
Reference Hint
Study anchor (closed-book): memorize Sales and use tax records from CSLB Law and Business Study Guide; California Department of Tax and. / California Department of Tax and Fee Administration construction contractors tax.; know the rule or calculation trigger without relying on exam-room lookup.
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