Practice test

Free Contractor License Practice Test

Take our free contractor license practice test with 20 questions covering business law, estimating, and building codes. See your score instantly.

These questions are for study practice only and are not official exam questions.

Question 1

1

A contractor who performs work on a property and is not paid may file a legal claim against the property itself to secure payment. What is this claim called?

Question 2

2

Which type of business entity provides its owners with personal liability protection while allowing profits and losses to pass directly to the owners' personal tax returns?

Question 3

3

Workers' compensation insurance is primarily designed to cover which of the following?

Question 4

4

A contractor's license bond primarily protects which party?

Question 5

5

Which federal agency establishes and enforces workplace safety and health regulations for the construction industry?

Question 6

6

A subcontractor completes rough framing on a commercial project. The general contractor then verbally requests additional blocking that was not in the original contract. The subcontractor completes the extra work. Under standard contract law, which document should the subcontractor have obtained BEFORE starting the extra work?

Question 7

7

An employee's gross weekly wage is $1,000. The employer must match the employee's Social Security and Medicare (FICA) contributions. Assuming a combined FICA rate of 7.65%, how much does the employer owe in matching FICA taxes for that employee in one week?

Question 8

8

Under the legal concept of 'respondeat superior,' a contractor can be held liable for which of the following?

Question 9

9

A contractor discovers during a competitive sealed bid that a competitor's bid envelope was accidentally left open on the table before bid opening. Reviewing the competitor's number to underbid it by $500 is BEST described as:

Question 10

10

Which type of lien waiver releases lien rights only up to the amount of a specific progress payment and retains rights for future unpaid amounts?

Question 11

11

A general contractor hires a worker and classifies him as an independent contractor rather than an employee. Which of the following factors would MOST support a finding that the worker is actually an employee?

Question 12

12

A general contractor's contract contains an indemnification clause stating the contractor shall indemnify the owner for 'any and all claims arising out of the project, regardless of fault.' A worker injured by the owner's own negligence sues both parties. Which legal concept is most likely to limit enforcement of this clause in many states?

Question 13

13

A contractor is classified as an S Corporation for tax purposes. The owner-operator pays himself a reasonable salary of $80,000 per year and takes an additional $60,000 distribution from profits. Which of the following best describes the tax treatment of the $60,000 distribution?

Question 14

14

A contractor enters a fixed-price contract with a force majeure clause. A prolonged material shortage caused by a regional natural disaster delays project completion by 90 days, causing the owner to suffer economic losses. If the force majeure clause is properly drafted and the shortage qualifies as a covered event, what is the most likely outcome?

Question 15

15

A contractor purchases lumber for $4,000 and sells it to the client at $5,000. What is the markup percentage applied to the cost?

Question 16

16

Which of the following best defines 'overhead' in a construction estimate?

Question 17

17

A room measures 15 feet by 20 feet. A contractor needs to install floor tile. How many square feet of tile area must be estimated for this room?

Question 18

18

In an estimate, 'direct costs' typically include which of the following?

Question 19

19

A contractor's annual overhead costs total $150,000. The company projects $600,000 in direct labor costs for the year. What overhead rate should the contractor apply to direct labor when pricing each job?

Question 20

20

A job's total direct costs (labor + materials + subs) are $80,000. The contractor applies a 25% overhead allocation and wants a 10% profit on the selling price (a 10% gross margin). What should the bid price be?

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