In this paper two fundamental questions in the contracted Schr\"odinger equation (CSE) approach are considered by using Lipkin's quasispin model: 1-1 mapping between the second-order reduced density matrix (2-RDM) and the wave function of an excited state, and the uniqueness of the solution of CSE under incomplete N-representability conditions. We present some examples of the wave functions that give the same 2-RDM as the excited state. Thus 2-RDM of an excited state does not determine the wave function uniquely, and it alone cannot be used as basic variable for excited states of the density-matrix theory. Under the incomplete representability constraints the solution of the second-order CSE contains all the exact 4-RDMs together with the spurious ones. We examined the distribution of the solutions as a function of energy, and found that the solutions are well separated from each other under the P- and G-representability conditions of 4-RDM in the low-energy region, but with moderate interaction, or in the higher-energy region, there exist spurious solutions for almost all energies. Thus the G condition of 4-RDM is not sufficient to solve the excited states, although it gives accurate results for the ground state of Lipkin's model.
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