Bonds and Business Records Flashcards
7 cards from real DMV practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Bonds and Business Records flashcards as text
A dealer operates at two separate locations. What is generally required regarding surety bonds for multiple locations?
Answer: One bond covers all locations under the same dealer number
In most cases, a single surety bond covers the dealer license number, which applies to all licensed locations under that number.
What is the significance of the 'effective date' on a surety bond filed with the DMV?
Answer: It marks the start of the period during which the bond provides coverage
The effective date is when bond coverage begins; claims relating to acts before this date are generally not covered.
Which of the following must a dealer record and retain related to a trade-in vehicle?
Answer: All records related to acquisition: title, condition disclosure, and how the trade-in was credited
Trade-in vehicles are acquired inventory; dealers must retain the title, any condition disclosures, and how credit was applied in the transaction.
Under California law, who has the authority to inspect a licensed dealer's business records?
Answer: DMV investigators and authorized peace officers
DMV investigators and peace officers have statutory authority to inspect dealer records during business hours.
A dealer's surety bond is set to expire and the dealer does not renew it. What action will the DMV most likely take?
Answer: Immediately suspend or revoke the dealer's license
Operating without a valid surety bond violates licensing requirements, and the DMV will suspend or revoke the dealer's license.
What information must a dealer include in the 'dealer log' or vehicle inventory record?
Answer: VIN, acquisition date, source of acquisition, and disposition for every vehicle
The dealer's inventory log must track each vehicle's VIN, when and how it was acquired, and what happened to it (sold, wholesaled, etc.).
If a buyer's order is altered after the customer signed it, what is the most serious potential consequence for the dealer?
Answer: License revocation and possible criminal fraud charges
Altering a signed buyer's order constitutes document fraud, which can result in license revocation and criminal prosecution.