A progress billing includes $3,700 for materials stored in the contractor's warehouse, but the contract allows billing only for work performed or materials delivered to the project. What is the best response?
Correct Answer
C) Reject or revise that billing line until it matches the contract payment terms.
Progress billing should follow the written payment terms; a charge outside the allowed delivery or work-value condition should be rejected or revised.
Why This Is the Correct Answer
Progress billing should follow the written payment terms; a charge outside the allowed delivery or work-value condition should be rejected or revised.
Why the Other Options Are Wrong
Option A: Approve the charge because the contractor bought the materials.
Approve the charge because the contractor bought the materials. puts the item in the wrong financial bucket, timing, base, or comparison for progress payment controls.
Option B: Hide the materials charge inside the labor line.
Hide the materials charge inside the labor line. puts the item in the wrong financial bucket, timing, base, or comparison for progress payment controls.
Option D: Collect the amount as a separate cash deposit outside the contract, even though the written payment schedule says otherwise.
Collect the amount as a separate cash deposit outside the contract, even though the written payment schedule says otherwise. puts the item in the wrong financial bucket, timing, base, or comparison for progress payment controls.
Memory Technique
Progress Payment ledger for Checking Residential: put follow in the right drawer.
Reference Hint
Study anchor (closed-book): memorize Progress payment controls from CSLB Home Improvement Contracts; CSLB 2026 Law Book / Business and Professions Code Section 7159 payment schedule; know the rule or calculation trigger without relying on exam-room lookup.
More Law & Business Questions
A Fresno homeowner wants a $725 cabinet repair and trim adjustment. Which contract step best matches CA home improvement requirements?
A project has $6,500 retainage withheld. The owner releases 60 percent of retainage at substantial completion. How much cash is released?
Cash is $52,500 and monthly burn is $17,500. How many months of runway are available?
A supplier offers 1.5 percent early-pay discount on a $22,000 invoice. What is the discount?
A balance sheet lists assets of $310,000 and liabilities of $185,000. What is owner's equity?
A job is estimated to cost $135,000. What price gives a 25 percent gross margin?
A customer invoice of $4,000 has a stated late charge of 1.5 percent. What late charge is added?
A bid has direct labor of $18,000, materials of $12,500, and equipment rental of $3,500. If the contractor adds 20 percent markup on direct cost, what is the bid price?
A contractor wants a 25 percent gross margin on a job with estimated cost of $60,000. What selling price gives that margin?
A completed project sold for $150,000 and had total cost of $126,000. What gross margin percentage did the project earn?