FLORIDA GENERAL CONTRACTOR LICENSE EXAM –
CONTRACT ADMINISTRATION, PROJECT MANAGEMENT &
BUSINESS & FINANCE COMPLETE EXAM QUESTIONS AND
VERIFIED ANSWERS | 2026–2027 LATEST UPDATE |
GUARANTEED PASS | DETAILED RATIONALES | FULL STUDY
GUIDE | EXAM PREP | PRACTICE TEST | CERTIFICATION
PREPARATION
SECTION ONE: QUESTIONS 1–100
1) Which Florida statute establishes the licensing and regulatory framework for construction
contractors?
A) Chapter 558, Florida Statutes
B) Chapter 713, Florida Statutes
C) Chapter 489, Florida Statutes
D) Chapter 720, Florida Statutes
Correct Answer: C) Chapter 489, Florida Statutes
Rationale: Chapter 489, Florida Statutes, known as the "Construction Contracting" statute, governs
the licensing, regulation, and discipline of construction contractors in Florida. Chapter 713 addresses
construction liens, Chapter 558 covers construction defect claims, and Chapter 720 regulates
homeowners' associations. The Construction Industry Licensing Board (CILB) operates under Chapter
489 authority .
2) What is the minimum passing score required for each portion of the Florida General Contractor
licensing examination?
A) 65%
B) 70%
C) 75%
D) 80%
Correct Answer: B) 70%
Rationale: The Florida Construction Industry Licensing Board (CILB) requires a minimum passing score
of 70% on each exam portion. For the Business & Finance exam, this typically means correctly
answering approximately 84 of the 120 scored questions. All three portions—Business & Finance,
Contract Administration, and Project Management—must be passed at the 70% threshold .
3) Under Florida law, a contract entered into by an unlicensed contractor is:
,A) Voidable by the owner only
B) Unenforceable by the unlicensed contractor
C) Enforceable if the owner benefited from the work
D) Valid after payment of a $1,000 fine
Correct Answer: B) Unenforceable by the unlicensed contractor
Rationale: Section 489.128, Florida Statutes, expressly makes contracts entered into by unlicensed
contractors unenforceable. This provision protects consumers and reinforces the importance of
proper licensing. The unlicensed contractor cannot recover payment or enforce contract terms,
regardless of whether the owner benefited from the work performed .
4) Which of the following is NOT an essential element required for a valid contract?
A) Offer
B) Acceptance
C) Consideration
D) Notarization
Correct Answer: D) Notarization
Rationale: The three essential elements of a valid contract are offer, acceptance, and consideration.
Notarization is not generally required for contract validity; it serves primarily to verify the identity of
signatories. While certain documents like deeds may require notarization, the absence of notarization
does not invalidate a construction contract that contains the three essential elements .
5) A contractor agrees to build a custom home for a fixed price of $450,000. The contractor bears
the risk of any cost overruns. This is an example of which type of contract?
A) Cost-plus contract
B) Lump sum contract
C) Unit price contract
D) Time and materials contract
Correct Answer: B) Lump sum contract
Rationale: In a lump sum (or fixed-price) contract, the contractor agrees to perform the entire scope
of work for a predetermined total price. The contractor assumes the risk of cost overruns, as any
expenses exceeding the contract amount are absorbed by the contractor. This contrasts with cost-plus
contracts where the owner bears cost risk .
6) What is the primary purpose of a Schedule of Values?
A) To list all subcontractors on a project
B) To break down the total contract price into component work items for progress payment purposes
C) To schedule material deliveries to the jobsite
D) To document change orders during construction
,Correct Answer: B) To break down the total contract price into component work items for progress
payment purposes
Rationale: A Schedule of Values is a start-to-finish list of work items on a project, broken down into
component parts with corresponding values. It represents the entire project and contract price and
serves as the basis for progress payments. Each work item's value is used to determine the amount
due during periodic payment applications .
7) Which financial document presents a company's financial position at a specific point in time,
showing assets, liabilities, and owner's equity?
A) Income Statement (Profit & Loss)
B) Statement of Cash Flows
C) Balance Sheet
D) Work-in-Progress Schedule
Correct Answer: C) Balance Sheet
Rationale: The Balance Sheet provides a snapshot of a company's financial position at a specific
moment, organized around the fundamental accounting equation: Assets = Liabilities + Owner's
Equity. The Income Statement measures profitability over a period, while the Cash Flow Statement
tracks cash movement. The Work-in-Progress Schedule focuses on construction project revenue
recognition .
8) The fundamental accounting equation is:
A) Revenue – Expenses = Net Income
B) Assets = Liabilities + Owner's Equity
C) Current Assets – Current Liabilities = Working Capital
D) Gross Profit – Overhead = Net Income
Correct Answer: B) Assets = Liabilities + Owner's Equity
Rationale: The accounting equation (Assets = Liabilities + Owner's Equity) is the foundation of double-
entry bookkeeping and balance sheet preparation. It states that everything a company owns (assets)
is financed by either borrowing (liabilities) or owner investment (equity). Understanding this equation
is essential for reading and interpreting financial statements .
9) A subcontractor completes work but has not been paid due to the general contractor's financial
difficulties. What is the appropriate legal remedy?
A) File a construction lien
B) File a lawsuit for breach of contract only
C) Stop all work permanently on the project
D) File for bankruptcy protection
Correct Answer: A) File a construction lien
, Rationale: A construction lien (mechanic's lien) is the primary legal remedy available to
subcontractors and suppliers who have not been paid for work performed or materials provided.
Under Florida's construction lien laws (Chapter 713), the subcontractor can file a claim of lien against
the property to secure payment rights. However, strict notice and timing requirements must be
followed .
10) What is "consideration" in the context of construction contract law?
A) A written clause addressing project delays
B) Something of value exchanged between parties that makes a promise enforceable
C) A penalty for non-performance
D) A detailed project schedule
Correct Answer: B) Something of value exchanged between parties that makes a promise enforceable
Rationale: Consideration is the bargained-for exchange that makes a contract legally enforceable. In
construction contracts, consideration typically takes the form of the contractor's promise to perform
work in exchange for the owner's promise to pay money. Without consideration, a promise is
generally not legally binding .
11) Which Florida statute governs construction lien claims by persons not in privity with the
property owner?
A) Chapter 558
B) Chapter 713, Part I
C) Chapter 489
D) Chapter 720
Correct Answer: B) Chapter 713, Part I
Rationale: Chapter 713, Part I, Florida Statutes, governs construction liens (mechanic's liens) and
provides the legal framework for lien claims by subcontractors, suppliers, and others who are not in
direct privity with the property owner. Chapter 558 addresses construction defects, while Chapter 489
governs contractor licensing. Proper lien procedures must be followed to preserve payment rights .
12) A contractor's current assets total $250,000 and current liabilities total $180,000. What is the
working capital?
A) $70,000
B) $180,000
C) $250,000
D) $430,000
Correct Answer: A) $70,000
Rationale: Working capital is calculated as Current Assets minus Current Liabilities ($250,000 –
$180,000 = $70,000). Working capital represents the funds available for day-to-day operations and is
CONTRACT ADMINISTRATION, PROJECT MANAGEMENT &
BUSINESS & FINANCE COMPLETE EXAM QUESTIONS AND
VERIFIED ANSWERS | 2026–2027 LATEST UPDATE |
GUARANTEED PASS | DETAILED RATIONALES | FULL STUDY
GUIDE | EXAM PREP | PRACTICE TEST | CERTIFICATION
PREPARATION
SECTION ONE: QUESTIONS 1–100
1) Which Florida statute establishes the licensing and regulatory framework for construction
contractors?
A) Chapter 558, Florida Statutes
B) Chapter 713, Florida Statutes
C) Chapter 489, Florida Statutes
D) Chapter 720, Florida Statutes
Correct Answer: C) Chapter 489, Florida Statutes
Rationale: Chapter 489, Florida Statutes, known as the "Construction Contracting" statute, governs
the licensing, regulation, and discipline of construction contractors in Florida. Chapter 713 addresses
construction liens, Chapter 558 covers construction defect claims, and Chapter 720 regulates
homeowners' associations. The Construction Industry Licensing Board (CILB) operates under Chapter
489 authority .
2) What is the minimum passing score required for each portion of the Florida General Contractor
licensing examination?
A) 65%
B) 70%
C) 75%
D) 80%
Correct Answer: B) 70%
Rationale: The Florida Construction Industry Licensing Board (CILB) requires a minimum passing score
of 70% on each exam portion. For the Business & Finance exam, this typically means correctly
answering approximately 84 of the 120 scored questions. All three portions—Business & Finance,
Contract Administration, and Project Management—must be passed at the 70% threshold .
3) Under Florida law, a contract entered into by an unlicensed contractor is:
,A) Voidable by the owner only
B) Unenforceable by the unlicensed contractor
C) Enforceable if the owner benefited from the work
D) Valid after payment of a $1,000 fine
Correct Answer: B) Unenforceable by the unlicensed contractor
Rationale: Section 489.128, Florida Statutes, expressly makes contracts entered into by unlicensed
contractors unenforceable. This provision protects consumers and reinforces the importance of
proper licensing. The unlicensed contractor cannot recover payment or enforce contract terms,
regardless of whether the owner benefited from the work performed .
4) Which of the following is NOT an essential element required for a valid contract?
A) Offer
B) Acceptance
C) Consideration
D) Notarization
Correct Answer: D) Notarization
Rationale: The three essential elements of a valid contract are offer, acceptance, and consideration.
Notarization is not generally required for contract validity; it serves primarily to verify the identity of
signatories. While certain documents like deeds may require notarization, the absence of notarization
does not invalidate a construction contract that contains the three essential elements .
5) A contractor agrees to build a custom home for a fixed price of $450,000. The contractor bears
the risk of any cost overruns. This is an example of which type of contract?
A) Cost-plus contract
B) Lump sum contract
C) Unit price contract
D) Time and materials contract
Correct Answer: B) Lump sum contract
Rationale: In a lump sum (or fixed-price) contract, the contractor agrees to perform the entire scope
of work for a predetermined total price. The contractor assumes the risk of cost overruns, as any
expenses exceeding the contract amount are absorbed by the contractor. This contrasts with cost-plus
contracts where the owner bears cost risk .
6) What is the primary purpose of a Schedule of Values?
A) To list all subcontractors on a project
B) To break down the total contract price into component work items for progress payment purposes
C) To schedule material deliveries to the jobsite
D) To document change orders during construction
,Correct Answer: B) To break down the total contract price into component work items for progress
payment purposes
Rationale: A Schedule of Values is a start-to-finish list of work items on a project, broken down into
component parts with corresponding values. It represents the entire project and contract price and
serves as the basis for progress payments. Each work item's value is used to determine the amount
due during periodic payment applications .
7) Which financial document presents a company's financial position at a specific point in time,
showing assets, liabilities, and owner's equity?
A) Income Statement (Profit & Loss)
B) Statement of Cash Flows
C) Balance Sheet
D) Work-in-Progress Schedule
Correct Answer: C) Balance Sheet
Rationale: The Balance Sheet provides a snapshot of a company's financial position at a specific
moment, organized around the fundamental accounting equation: Assets = Liabilities + Owner's
Equity. The Income Statement measures profitability over a period, while the Cash Flow Statement
tracks cash movement. The Work-in-Progress Schedule focuses on construction project revenue
recognition .
8) The fundamental accounting equation is:
A) Revenue – Expenses = Net Income
B) Assets = Liabilities + Owner's Equity
C) Current Assets – Current Liabilities = Working Capital
D) Gross Profit – Overhead = Net Income
Correct Answer: B) Assets = Liabilities + Owner's Equity
Rationale: The accounting equation (Assets = Liabilities + Owner's Equity) is the foundation of double-
entry bookkeeping and balance sheet preparation. It states that everything a company owns (assets)
is financed by either borrowing (liabilities) or owner investment (equity). Understanding this equation
is essential for reading and interpreting financial statements .
9) A subcontractor completes work but has not been paid due to the general contractor's financial
difficulties. What is the appropriate legal remedy?
A) File a construction lien
B) File a lawsuit for breach of contract only
C) Stop all work permanently on the project
D) File for bankruptcy protection
Correct Answer: A) File a construction lien
, Rationale: A construction lien (mechanic's lien) is the primary legal remedy available to
subcontractors and suppliers who have not been paid for work performed or materials provided.
Under Florida's construction lien laws (Chapter 713), the subcontractor can file a claim of lien against
the property to secure payment rights. However, strict notice and timing requirements must be
followed .
10) What is "consideration" in the context of construction contract law?
A) A written clause addressing project delays
B) Something of value exchanged between parties that makes a promise enforceable
C) A penalty for non-performance
D) A detailed project schedule
Correct Answer: B) Something of value exchanged between parties that makes a promise enforceable
Rationale: Consideration is the bargained-for exchange that makes a contract legally enforceable. In
construction contracts, consideration typically takes the form of the contractor's promise to perform
work in exchange for the owner's promise to pay money. Without consideration, a promise is
generally not legally binding .
11) Which Florida statute governs construction lien claims by persons not in privity with the
property owner?
A) Chapter 558
B) Chapter 713, Part I
C) Chapter 489
D) Chapter 720
Correct Answer: B) Chapter 713, Part I
Rationale: Chapter 713, Part I, Florida Statutes, governs construction liens (mechanic's liens) and
provides the legal framework for lien claims by subcontractors, suppliers, and others who are not in
direct privity with the property owner. Chapter 558 addresses construction defects, while Chapter 489
governs contractor licensing. Proper lien procedures must be followed to preserve payment rights .
12) A contractor's current assets total $250,000 and current liabilities total $180,000. What is the
working capital?
A) $70,000
B) $180,000
C) $250,000
D) $430,000
Correct Answer: A) $70,000
Rationale: Working capital is calculated as Current Assets minus Current Liabilities ($250,000 –
$180,000 = $70,000). Working capital represents the funds available for day-to-day operations and is
