A contract has a $3,800 permit allowance, and actual permit charges are $4,125. What increase should be documented?
Correct Answer
D) $325.
The actual charges exceed the allowance by $325.
Why This Is the Correct Answer
The actual charges exceed the allowance by $325.
Why the Other Options Are Wrong
Option A: $3,800.
$3,800 reports the $3,800 permit allowance alone instead of subtracting it from the $4,125 actual permit charges. The correct calculation is 4,125 - 3,800 = 325.
Option B: $7,925.
$7,925 adds 4,125 and 3,800 instead of taking the difference. The correct calculation is 4,125 - 3,800 = 325.
Option C: $4,125.
$4,125 reports 4,125 alone instead of subtracting 3,800. The correct calculation is 4,125 - 3,800 = 325.
Reference Hint
Study anchor (closed-book): memorize Allowance reconciliation from CSLB 2026 Law Book; CSLB Home Improvement Contracts / Business and Professions Code Section 7159 home improvement contract requirements; know the rule or calculation trigger without relying on exam-room lookup.
Independent practice; verify any reference hint against the edition and category permitted for your booking. Official exam and reference-list sources →
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