Sample practice questions

A few real questions from this free bank, with full explanations. Use the practice tool above for the whole set.

1. 1. Business & Licensing

   A contractor who holds a Class "B" General Building Contractor license may perform work in which situation?

   • a.Framing, roofing, and drywall on a new home
   • b.Grading and paving a parking lot only
   • c.Installing a new electrical panel only
   • d.Replacing underground water mains only

   Answer: a

   Explanation: A Class B licensee may take contracts for structures and can self-perform two or more unrelated subcontractor trades. Installing only an electrical panel or replacing water mains would require C-specialty licenses, and grading/paving is Class A work.

   Source: Bus. & Prof. Code §7057

2. 2. Contracts & Execution

   After receiving retention from the owner, a general contractor on a private works project must pass through each subcontractor's retention within:

   • a.10 days
   • b.30 days
   • c.45 days
   • d.60 days

   Answer: a

   Explanation: Once the general contractor receives retention from the owner, it must release each subcontractor's share of that retention within 10 days on a private works project.

   Source: Civil Code §8814

3. 3. Business Finances

   A contractor wins a job for $300,000 and incurs total costs of $264,000. What is the profit margin on the selling price?

   • a.13.6%
   • b.10%
   • c.12%
   • d.36%

   Answer: c

   Explanation: Profit = $300,000 − $264,000 = $36,000. Margin = Profit ÷ Selling Price = $36,000 ÷ $300,000 = 0.12 = 12%.

4. 4. Public Works

   When a member of the public requests a contractor's certified payroll records from a public works project, the records that are released to the public must have which information redacted?

   • a.The names of all crafts and classifications worked
   • b.Each worker's name, address, and social security number
   • c.The hours each worker performed and the wage rates paid
   • d.The name of the awarding public agency

   Answer: b

   Explanation: Labor Code §1776 requires certified payroll to be available for inspection, but copies provided to the public must have personal identifying information — such as each worker's name, address, and social security number — redacted to protect worker privacy.

   Source: Labor Code §1776

5. 5. Contracts & Execution

   Under California's Right to Repair Act (Civil Code §895 et seq., enacted by SB 800), what is the general statute of limitations for a homeowner to bring a construction defect claim against the builder for a function/use defect not otherwise specified?

   • a.Four years for patent defects and ten years for latent defects, under CCP §337.15
   • b.One year from close of escrow, the period for the fit-and-finish warranty
   • c.Three years from discovery of the defect, under the general tort statute
   • d.Ten years from substantial completion, with shorter periods for some defects

   Answer: d

   Explanation: Civil Code §941(a) sets the outside limit for a Right to Repair Act claim at 10 years after substantial completion. Inside that window §896 gives many defect types their own shorter period — 4 years for plumbing and sewer, 5 years for paint and stains, 1 year for landscaping and irrigation, 2 years for noise transmission — so the answer is layered, not a single number. (a) is the PRE-SB 800 framework of Code of Civil Procedure §337.15, which still governs projects outside the Act but is not the §896 scheme this question asks about. (b) confuses the limitations period with the separate one-year express fit-and-finish warranty a builder must give under Civil Code §900. (c) applies the general three-year discovery rule for injury to real property (CCP §338(b)), which SB 800 displaced for covered residential construction.

   Source: Civil Code §896, §941; cf. Civil Code §900, Code Civ. Proc. §337.15, §338(b)

6. 6. Contracts & Execution

   The implied warranty that construction work will be performed in a competent, workmanlike manner is best described as:

   • a.A warranty that applies only if the contractor signs a separate paper
   • b.A promise that the owner will be satisfied whatever the standard of care
   • c.A guarantee of a specific profit margin on the completed project
   • d.A warranty imposed by law that the work meets a competent standard

   Answer: d

   Explanation: Every construction contract carries an implied promise that the work will be done in a good and workmanlike manner — to the standard of a reasonably skilled contractor in that trade — whether or not anyone wrote it down. On residential construction the legislature made much of this explicit: Civil Code §896 sets specific standards covering everything from water intrusion to soils to noise transmission, and §900 adds a one-year express written warranty on fit and finish. (a) inverts the word 'implied'; a warranty that needed a separate signature would be an express one. (b) sets the bar at the owner's personal satisfaction, a taste standard the law does not import into ordinary construction. (c) confuses a quality warranty with a financial one — nothing guarantees the contractor's margin, or the owner's.

   Source: Civil Code §896, §900

7. 7. Employment

   A staffing agency employs temporary workers assigned to a contractor. How often must the staffing agency generally pay these temporary employees under Labor Code §201.3?

   • a.Monthly, on a designated payday each month
   • b.Whenever the client contractor pays the agency
   • c.At the end of each assignment, however long
   • d.Weekly, whatever day the assignment happens to end

   Answer: d

   Explanation: Labor Code §201.3(b)(1) requires a temporary services employer to pay its assigned employees weekly, with the prior week's wages due on a regular designated payday, regardless of when the assignment ends. (b) is the pay-when-paid practice the section was written to stop - the agency's duty to its employees does not depend on the client remitting the invoice, and Labor Code §2810.3 can put the client contractor on the hook for those wages anyway. (c) holds the money to the end of the assignment, which on a long job could mean months. (a) applies the ordinary §204 rhythm, which is itself twice monthly rather than monthly, and in any case is displaced here by §201.3. Day-to-day and same-day assignments have their own rules in §201.3(b)(4)-(5).

   Source: Labor Code §201.3(b)(1)

8. 8. Business Finances

   A contractor's current ratio is 0.8 to 1. This most likely indicates:

   • a.Liquidity is strong for a firm that is growing
   • b.The company owes almost no short-term debt
   • c.Current liabilities exceed current assets
   • d.Profits are high relative to the total assets

   Answer: c

   Explanation: A current ratio of 0.8 to 1 means there are only 80 cents of current assets for every dollar of current liabilities, so the near-term bills exceed the near-term resources and lenders and sureties read it as a warning. A ratio below 1.0 is the definition of weak liquidity, not strong. A firm with no short-term debt would show a very high ratio, not a low one. And the current ratio says nothing about profit, which is measured on the income statement.

9. 9. Safety

   Before entering a permit-required confined space, the entry permit must document that the atmosphere has been tested. Which is typically tested FIRST?

   • a.Flammables, then oxygen, then toxics
   • b.Toxics, then oxygen, then flammables
   • c.Oxygen, then toxics, then flammables
   • d.Oxygen, then flammables, then toxics

   Answer: d

   Explanation: Pre-entry testing runs oxygen first, then combustible gases and vapours, then toxic contaminants, and the order is set by the instruments rather than by which hazard is worst. Most combustible gas sensors are catalytic and need oxygen to burn the sample: in an oxygen-deficient atmosphere they read low or read nothing, so a flammables-first result (a) can be falsely reassuring. Oxygen is also the reading that changes how the others are interpreted, since enrichment widens the flammable range while deficiency is immediately dangerous to life on its own. Toxics come last because that sensor is least affected by the other two. Both (b) and (c) put the toxic reading ahead of the flammable one and lose the safeguard.

   Source: 8 CCR §5157(d)(5)(iii); 29 CFR 1926.1204(e)

10. 10. Insurance & Liens

    After a Notice of Completion is recorded on a private work of improvement, the DIRECT (prime) contractor must record its mechanics lien within:

    • a.60 days
    • b.90 days
    • c.6 months
    • d.30 days

    Answer: a

    Explanation: Civil Code §8414 gives the direct contractor 60 days after recording of a notice of completion or cessation, while all other claimants get 30 days. If no such notice is recorded, all claimants have 90 days from completion under §8412.

    Source: Civ. Code §8414