Free Business & Law Exam Practice Questions

Sample Practice Questions

Try these 10 sample questions from the Business & Law Exam practice bank. Each includes the answer and explanation. Continue with the interactive practice above to review the full question set.

1. 1An individual applying for a Georgia general contractor license has otherwise acceptable experience. What minimum age must the applicant have reached?

   1. A. 18 years
   2. B. 19 years
   3. C. 21 years
   4. D. 25 years

   Answer: C

   Explanation: Rule 553-4-.01 requires that the applicant "Is at least 21 years of age." Therefore 21 is the controlling minimum.

   Reference: Ga Rules Dept 553 (2026) — Rule 553-4-.01(3)(a)

2. 2When preparing a comprehensive construction cost estimate, which group of costs should be included for the contractor's physical work?

   1. A. Labor and materials only
   2. B. Labor, materials, markups, overhead, and profit
   3. C. Materials, permits, and taxes only
   4. D. Labor, equipment rental, and bonds only

   Answer: B

   Explanation: The State Construction Manual requires the estimate to incorporate "all associated costs and expenses" and expressly identifies labor, material, markups, overhead, and profit.

   Reference: State Construction Manual — Chapter 2.4, Construction Cost

3. 3When does a new contracting business ordinarily choose its federal tax accounting method?

   1. A. When it files its first income tax return
   2. B. When it hires its first employee
   3. C. When it receives its first progress payment
   4. D. When it closes its first contract

   Answer: A

   Explanation: IRS Publication 583 says: "You choose an accounting method for your business when you file your first income tax return."

   Reference: Publication 583 (12/2024), Starting a Business and Keeping Records | Internal Revenue Service — Choosing an Accounting Method

4. 4For Georgia sales and use tax, how is a real-property contractor treated regarding tangible personal property consumed in the contract?

   1. A. As a broker for the owner
   2. B. As the consumer of the property
   3. C. As a tax-exempt wholesaler
   4. D. As a marketplace facilitator

   Answer: B

   Explanation: Revenue Rule 560-12-2-.26 says the contractor "is deemed to be the consumer of all tangible personal property used or consumed in performing such contract."

   Reference: Ga Rules Dept 560 Revenue (2026) — Rule 560-12-2-.26(1)

5. 5What federal minimum hourly wage generally applies to covered employees of a Georgia construction business?

   1. A. $5.15
   2. B. $6.55
   3. C. $7.25
   4. D. $10.00

   Answer: C

   Explanation: The Georgia Department of Labor states: "The federal minimum wage is $7.25 per hour."

   Reference: Minimum Wage | Georgia Department of Labor — Minimum Wage

6. 6No lender is designated to file it. By when must a Georgia Notice of Commencement be filed after the contractor physically starts work?

   1. A. Within 10 days
   2. B. Within 15 days
   3. C. Within 30 days
   4. D. Within 90 days

   Answer: B

   Explanation: The Georgia DCA manual says the notice must be filed "not later than 15 days after the Contractor physically commences work."

   Reference: Author: Samanta Carvalho — O.C.G.A. § 44-14-361.5(b); DCA manual p. 45

7. 7For Georgia's residential-contractor written-warranty rule, when is a single-family construction agreement a covered contract based on value?

   1. A. When value exceeds $1,000
   2. B. When value exceeds $2,500
   3. C. When value reaches $10,000
   4. D. When value reaches $25,000

   Answer: B

   Explanation: Rule 553-7-.01 defines a covered contract where "the total value of the work ... exceeds $2,500.00."

   Reference: Ga Rules Dept 553 (2026) — Rule 553-7-.01(1)(a)

8. 8A Georgia construction employer regularly employs two full-time workers and one regular part-time worker. Must it provide workers' compensation coverage?

   1. A. No, because only full-time workers count
   2. B. No, until it has four workers
   3. C. Yes, because three or more regular workers trigger coverage
   4. D. Yes, but only on public projects

   Answer: C

   Explanation: The State Board says: "Every employer ... regularly employing three or more persons, part-time or full time, shall provide workers' compensation insurance coverage."

   Reference: Employer Information | State Board of Workers' Compensation — O.C.G.A. § 34-9-2(a)(2); Employer

9. 9Which inspection arrangement must a construction accident-prevention program include under OSHA?

   1. A. Frequent and regular site, material, and equipment inspections by competent persons
   2. B. Quarterly site, material, and equipment inspections by any available employee
   3. C. Post-incident site, material, and equipment inspections by the insurer
   4. D. Annual equipment-only inspections by the equipment supplier

   Answer: A

   Explanation: OSHA requires programs that provide for "frequent and regular inspections of the job sites, materials, and equipment to be made by competent persons."

   Reference: 1926.20 - General safety and health provisions. | Occupational Safety and Health Administration — 29 CFR 1926.20(b)(2)

10. 10A sole proprietor is applying for an unlimited Georgia general contractor license. What minimum net worth must the applicant affirm?

    1. A. $25,000
    2. B. $50,000
    3. C. $100,000
    4. D. $150,000

    Answer: D

    Explanation: Rule 553-4-.01 says applicants "shall affirm a minimum net worth in the amount of $150,000."

    Reference: Ga Rules Dept 553 (2026) — Rule 553-4-.01(3)(d)