ALABAMA GENERAL CONTRACTOR
LICENSING EXAM — 150 PRACTICE
QUESTIONS
1. What is the current Alabama statutory threshold generally
associated with the definition of a general contractor?
A. $25,000
B. $50,000
C. $75,000
D. $100,000
Correct Answer: D. $100,000
Rationale: Alabama law was amended to increase the general-
contracting threshold from $50,000 to $100,000.
2. Which Alabama board regulates general contractors?
A. Alabama Construction Commission
B. Alabama Licensing Board for General Contractors
C. Alabama Department of Labor Contractors Division
,D. Alabama Building Authority
Correct Answer: B. Alabama Licensing Board for General
Contractors
Rationale: The Alabama Licensing Board for General
Contractors administers licensing and regulatory requirements
for general contractors.
3. Which examination is required for Alabama prime
contractor applicants?
A. Business and Law examination
B. Real estate examination
C. Insurance examination
D. Property management examination
Correct Answer: A. Business and Law examination
Rationale: The Board states that all prime contractors must
take the Business and Law examination administered through
PSI.
4. What is the primary purpose of a contractor license?
A. To eliminate building inspections
,B. To demonstrate regulatory qualification to perform
regulated contracting work
C. To guarantee profitability
D. To guarantee every project will be completed on time
Correct Answer: B. To demonstrate regulatory
qualification to perform regulated contracting work
Rationale: Licensing establishes legal authority and regulatory
qualification; it does not guarantee project success.
5. Which party generally submits a bid directly to an owner
for a construction project?
A. Prime contractor
B. Material supplier
C. Laborer
D. Building inspector
Correct Answer: A. Prime contractor
Rationale: The prime contractor typically contracts directly
with the project owner.
, 6. A subcontractor generally contracts with whom?
A. The building inspector
B. The property tax office
C. The prime contractor
D. The architect's family
Correct Answer: C. The prime contractor
Rationale: A subcontractor normally performs a defined
portion of the work under contract with the prime contractor
or another authorized contracting party.
7. What is the primary function of a construction contract?
A. To establish the parties' rights and obligations
B. To replace all building codes
C. To eliminate inspections
D. To guarantee material prices
Correct Answer: A. To establish the parties' rights and
obligations
LICENSING EXAM — 150 PRACTICE
QUESTIONS
1. What is the current Alabama statutory threshold generally
associated with the definition of a general contractor?
A. $25,000
B. $50,000
C. $75,000
D. $100,000
Correct Answer: D. $100,000
Rationale: Alabama law was amended to increase the general-
contracting threshold from $50,000 to $100,000.
2. Which Alabama board regulates general contractors?
A. Alabama Construction Commission
B. Alabama Licensing Board for General Contractors
C. Alabama Department of Labor Contractors Division
,D. Alabama Building Authority
Correct Answer: B. Alabama Licensing Board for General
Contractors
Rationale: The Alabama Licensing Board for General
Contractors administers licensing and regulatory requirements
for general contractors.
3. Which examination is required for Alabama prime
contractor applicants?
A. Business and Law examination
B. Real estate examination
C. Insurance examination
D. Property management examination
Correct Answer: A. Business and Law examination
Rationale: The Board states that all prime contractors must
take the Business and Law examination administered through
PSI.
4. What is the primary purpose of a contractor license?
A. To eliminate building inspections
,B. To demonstrate regulatory qualification to perform
regulated contracting work
C. To guarantee profitability
D. To guarantee every project will be completed on time
Correct Answer: B. To demonstrate regulatory
qualification to perform regulated contracting work
Rationale: Licensing establishes legal authority and regulatory
qualification; it does not guarantee project success.
5. Which party generally submits a bid directly to an owner
for a construction project?
A. Prime contractor
B. Material supplier
C. Laborer
D. Building inspector
Correct Answer: A. Prime contractor
Rationale: The prime contractor typically contracts directly
with the project owner.
, 6. A subcontractor generally contracts with whom?
A. The building inspector
B. The property tax office
C. The prime contractor
D. The architect's family
Correct Answer: C. The prime contractor
Rationale: A subcontractor normally performs a defined
portion of the work under contract with the prime contractor
or another authorized contracting party.
7. What is the primary function of a construction contract?
A. To establish the parties' rights and obligations
B. To replace all building codes
C. To eliminate inspections
D. To guarantee material prices
Correct Answer: A. To establish the parties' rights and
obligations
