Tennessee Contractor License Exam Practice Test
Frequently asked questions
How many Tennessee Contractor License Exam practice questions are here?+
A full bank of original Tennessee Contractor License Exam practice questions across the official content areas, weighted like the real exam, with explanations. Free, no signup.
What is the Tennessee Contractor License Exam exam like?+
About 50 questions, 140 minutes, and you need 37 of 50 (73%)% to pass. Practice by topic here, then take the full timed mock exam to gauge readiness.
Are these the real exam questions?+
No. Every question is 100% original, written from public primary sources with explanations. We never copy real exam questions or paid prep material.
Can I study in Chinese or Spanish?+
PrepPass practice is in English, 中文 and Español. The official exam is in English — switch the question language to English any time to rehearse the exact terminology you'll see on test day.
Sample practice questions
A few real questions from this free bank, with full explanations. Use the practice tool above for the whole set.
- 1. Business Organization & Licensing
A construction business is organized as a corporation. If the corporation is sued and cannot pay a judgment, what is generally at risk?
- a.The personal homes and bank accounts of every shareholder
- b.The personal assets of the highest-paid officer only
- c.The assets owned by the corporation itself, not the shareholders' personal assets
- d.Nothing, because corporations cannot be sued
Answer: c
Explanation: A corporation is a separate legal entity from its owners (shareholders). This separation creates limited liability: creditors and judgments generally reach only the assets the corporation owns, and shareholders risk losing only what they invested — not their personal homes or savings. That protection can be lost only in unusual cases such as fraud or 'piercing the corporate veil.'
- 2. Estimating & Bidding
How many cubic yards of concrete are needed for a slab 27 ft long, 30 ft wide, and 4 inches thick?
- a.3.3 cubic yards
- b.6.7 cubic yards
- c.8.5 cubic yards
- d.10 cubic yards
Answer: d
Explanation: First convert thickness to feet: 4 in / 12 = 0.3333 ft. Volume in cubic feet = 27 x 30 x 0.3333 = 270 cubic feet. Convert to cubic yards by dividing by 27 (there are 27 cubic feet in a cubic yard): 270 / 27 = 10 cubic yards. Getting units consistent — feet for all three dimensions — is the key step.
- 3. Contracts & Contract Law
Under the Statute of Frauds, which of the following is generally required to be in writing to be enforceable?
- a.A one-hour verbal agreement to sweep a job site
- b.A casual promise to lend a friend a hammer
- c.An agreement to buy lunch for the crew
- d.A contract for the sale of land or an interest in real property
Answer: d
Explanation: The Statute of Frauds requires certain categories of contracts to be in writing and signed to be enforceable — most notably contracts for the sale of land or interests in real property, and agreements that cannot be performed within one year. This is why construction and real-property agreements are documented in writing. Minor, short, everyday arrangements are not covered.
- 4. Financial Management & Accounting
A contracting company has current assets of $240,000 and current liabilities of $120,000. What is its current ratio?
- a.0.5 to 1
- b.1.2 to 1
- c.2.0 to 1
- d.12 to 1
Answer: c
Explanation: Current ratio = current assets / current liabilities = $240,000 / $120,000 = 2.0. A ratio of 2.0 means the company has $2 of short-term assets for every $1 of short-term debt, which generally indicates healthy short-term liquidity. Sureties and lenders watch this ratio closely; a ratio below 1.0 signals the company may struggle to pay near-term obligations.
- 5. Safety & OSHA
According to the hierarchy of controls, which method of protecting workers from a hazard is MOST effective and should be considered first?
- a.Eliminating the hazard entirely
- b.Providing personal protective equipment (PPE)
- c.Posting a warning sign
- d.Writing the hazard into a safety manual
Answer: a
Explanation: The hierarchy of controls ranks protections from most to least effective: elimination, substitution, engineering controls, administrative controls, and finally PPE. Removing the hazard entirely is best because it does not depend on worker behavior or equipment holding up. PPE is the last line of defense — it only reduces exposure and relies on correct, consistent use, so it is the least reliable control on its own.
- 6. Employment & Labor Law
What is the purpose of Form I-9 that a contractor completes for each new hire?
- a.To calculate the employee's overtime rate
- b.To register the employee with the local building department
- c.To order the employee's personal protective equipment
- d.To verify the employee's identity and legal authorization to work in the United States
Answer: d
Explanation: The federal Form I-9 is used to verify each new employee's identity and their authorization to work in the United States, as required by immigration law. Employers must complete and retain an I-9 for every employee and review acceptable documents. It is separate from tax forms (like the W-4) and from any safety, permitting, or payroll-rate functions.
- 7. topics.cttn_licensing
How does the Tennessee Board for Licensing Contractors set a contractor's monetary limit (the largest project the license allows)?
- a.It equals five times gross annual revenue
- b.It is unlimited for every licensee
- c.It always equals the contractor's bond amount
- d.It equals the lesser of ten times the contractor's net worth or ten times its working capital
Answer: d
Explanation: Tennessee sets the monetary limit at the lesser of 10 times net worth or 10 times working capital, as shown on the required financial statement. The rule keeps a contractor's project size tied to its demonstrated financial capacity.
Source: T.C.A. §62-6-111; Board financial rules (monetary limit)
- 8. topics.cttn_estimating_bidding
A Tennessee contractor's job costs $60,000, and she wants a 25% margin on the selling price. What is the correct bid price?
- a.$75,000
- b.$80,000
- c.$72,000
- d.$48,000
Answer: b
Explanation: For a target margin, divide cost by (1 - margin): $60,000 / (1 - 0.25) = $60,000 / 0.75 = $80,000. Multiplying cost by 1.25 gives $75,000, which is only a 20% margin - the recurring markup-vs-margin trap.
Source: Margin: price = cost / (1 - margin)
- 9. topics.cttn_project_mgmt_lien
On Tennessee construction contracts, the amount of retainage that may be withheld from progress payments is capped by statute at what percentage, and the retained funds must be deposited where?
- a.10%, held by the owner
- b.5%, deposited into a separate, interest-bearing escrow account
- c.15%, held by the general contractor
- d.There is no cap; the contract controls
Answer: b
Explanation: Tennessee caps retainage at 5% of the amount of each progress payment and requires the retained funds to be deposited into a separate, interest-bearing escrow account. The cap protects the contractor's cash flow, and improper withholding carries penalties.
Source: T.C.A. §66-34-104 (retainage cap and escrow)
- 10. topics.cttn_labor
In Tennessee's construction industry, at how many employees does workers' compensation coverage generally become mandatory (stricter than the five-employee threshold for most other industries)?
- a.Only at 25 or more employees
- b.At ten or more employees
- c.At five or more employees
- d.At one or more employees
Answer: d
Explanation: Tennessee's construction industry is the strict case: employers providing construction services must carry workers' compensation coverage even with a single employee. Most non-construction Tennessee employers are not required to carry coverage until they have five or more.
Source: T.C.A. §50-6-902 (construction services providers)