LATEST GENERAL CONTRACTOR (B-2)
LICENSE EXAM | Q&A WITH RATIONALES
1. Which document outlines the scope of work,
schedule, and payment terms for a construction
project?
A) Purchase order
B) Submittal register
C) Contract agreement
D) Change order
Correct answer: C
Rationale: The contract is the primary legal
document defining the scope of work, payment
schedule, and responsibilities of both parties.
2. What is the primary purpose of a contractor
license bond?
A) Provide insurance for workers
B) Guarantee the project schedule
C) Ensure the contractor complies with laws
D) Protect the contractor from lawsuits
, Correct answer: C
Rationale: License bonds protect the public by
ensuring contractors follow state regulations.
3. Which accounting method recognizes income
when payment is received, rather than when it is
earned?
A) Cash method
B) Accrual method
C) Completed contract method
D) Percentage of completion method
Correct answer: A
Rationale: The cash method records revenue only
when money is actually received, while the accrual
method records it when earned.
4. A “mechanic’s lien” is used for what purpose?
A) To cancel a building permit
B) To prevent property sale
C) To secure payment for work completed
D) To renew a contractor license
, Correct answer: C
Rationale: A mechanic’s lien ensures contractors
and suppliers can claim unpaid compensation for
labor or materials.
5. Which document formally modifies the scope,
cost, or timeline of an existing contract?
A) Addendum
B) Change order
C) Purchase order
D) Invoice
Correct answer: B
Rationale: A change order is a written document
that alters the original contract, typically adjusting
the scope, cost, or schedule.
6. In a limited partnership, which partner is active in
the management of the firm and has unlimited
liability to its creditors?
A) Limited partner
B) Silent partner
C) General partner
, D) Contributing partner
Correct answer: C
Rationale: The general partner manages the
business and bears unlimited liability for its debts.
7. A change order should be issued when:
A) Work deviates from the original contract
B) A disagreement arises between workers
C) OSHA conducts an inspection
D) The project owner visits the site
Correct answer: A
Rationale: Change orders document formal
modifications to scope, cost, or schedule when work
deviates from the original contract plan.
8. Under the Fair Labor Standards Act, a standard
“work week” is defined as a period of 168 hours
during seven consecutive 24-hour periods. Overtime
pay is generally due for hours worked beyond:
A) 40 hours in a work week
B) 35 hours in a work week
LICENSE EXAM | Q&A WITH RATIONALES
1. Which document outlines the scope of work,
schedule, and payment terms for a construction
project?
A) Purchase order
B) Submittal register
C) Contract agreement
D) Change order
Correct answer: C
Rationale: The contract is the primary legal
document defining the scope of work, payment
schedule, and responsibilities of both parties.
2. What is the primary purpose of a contractor
license bond?
A) Provide insurance for workers
B) Guarantee the project schedule
C) Ensure the contractor complies with laws
D) Protect the contractor from lawsuits
, Correct answer: C
Rationale: License bonds protect the public by
ensuring contractors follow state regulations.
3. Which accounting method recognizes income
when payment is received, rather than when it is
earned?
A) Cash method
B) Accrual method
C) Completed contract method
D) Percentage of completion method
Correct answer: A
Rationale: The cash method records revenue only
when money is actually received, while the accrual
method records it when earned.
4. A “mechanic’s lien” is used for what purpose?
A) To cancel a building permit
B) To prevent property sale
C) To secure payment for work completed
D) To renew a contractor license
, Correct answer: C
Rationale: A mechanic’s lien ensures contractors
and suppliers can claim unpaid compensation for
labor or materials.
5. Which document formally modifies the scope,
cost, or timeline of an existing contract?
A) Addendum
B) Change order
C) Purchase order
D) Invoice
Correct answer: B
Rationale: A change order is a written document
that alters the original contract, typically adjusting
the scope, cost, or schedule.
6. In a limited partnership, which partner is active in
the management of the firm and has unlimited
liability to its creditors?
A) Limited partner
B) Silent partner
C) General partner
, D) Contributing partner
Correct answer: C
Rationale: The general partner manages the
business and bears unlimited liability for its debts.
7. A change order should be issued when:
A) Work deviates from the original contract
B) A disagreement arises between workers
C) OSHA conducts an inspection
D) The project owner visits the site
Correct answer: A
Rationale: Change orders document formal
modifications to scope, cost, or schedule when work
deviates from the original contract plan.
8. Under the Fair Labor Standards Act, a standard
“work week” is defined as a period of 168 hours
during seven consecutive 24-hour periods. Overtime
pay is generally due for hours worked beyond:
A) 40 hours in a work week
B) 35 hours in a work week
