An allowance is $4,400. The selected product costs $3,860, and no markup applies to allowance credits. What should be documented?
Correct Answer
B) $540 credit.
The selected product is $540 below the allowance, so the documented adjustment is a $540 credit.
Why This Is the Correct Answer
The selected product is $540 below the allowance, so the documented adjustment is a $540 credit.
Why the Other Options Are Wrong
Option A: $540 increase.
$540 increase. is not aligned with the supported result for allowance reconciliation; it has the wrong label or classification even if the number looks close.
Option C: $3,860 credit.
$3,860 credit. is above the supported result for allowance reconciliation; it likely adds an unsupported amount or compares the wrong financial base.
Option D: $8,260 total.
$8,260 total. is above the supported result for allowance reconciliation; it likely adds an unsupported amount or compares the wrong financial base.
Memory Technique
Allowance Reconciliation drawer for Reconciling Billing: label product before counting dollars.
Reference Hint
Study anchor (closed-book): memorize Allowance reconciliation from CSLB 2026 Law Book; CSLB Home Improvement Contracts / B&P Code Section 7159 home improvement contract requirements; know the rule or calculation trigger without relying on exam-room lookup.
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