General Contractor Licensing Examination | Questions
and Answers | 2026 Update | 100% Correct – GT.
1. Which of the following is the primary purpose of a building
permit?
A) To increase property value
B) To ensure compliance with building codes
C) To guarantee construction quality
D) To provide funding for the project
Answer: B) To ensure compliance with building codes
Rationale: Building permits are issued to ensure that construction
meets safety and zoning regulations and complies with local building
codes.
Image Label Idea: A city official reviewing a building permit
application with a construction site in the background.
2. A contractor is required to have which of the following to legally
operate?
A) Liability insurance only
B) General contractor license
C) Workers’ compensation only
D) Project financing
Answer: B) General contractor license
Rationale: A valid general contractor license is required to legally bid,
contract, and perform construction work in most jurisdictions.
Image Label Idea: A certificate labeled “General Contractor License”
displayed in an office.
,3. What is the primary responsibility of a general contractor on a
construction project?
A) Performing all labor tasks themselves
B) Supervising and coordinating subcontractors and construction
activities
C) Providing architectural design services
D) Selling construction materials
Answer: B) Supervising and coordinating subcontractors and
construction activities
Rationale: The general contractor manages the project schedule,
ensures quality, oversees subcontractors, and coordinates resources.
Image Label Idea: Diagram showing GC at the center coordinating
electricians, plumbers, and carpenters.
4. Which of the following is considered a fixed cost in construction?
A) Labor paid per hour
B) Equipment rental
C) Permit fees
D) Concrete for foundation
Answer: C) Permit fees
Rationale: Fixed costs remain constant regardless of the size of the
project, such as permit fees, insurance, or salaried staff.
Image Label Idea: Permit invoice labeled “Fixed Cost” on a
construction desk.
5. What does OSHA stand for?
A) Occupational Safety and Health Administration
B) Office of Safety and Hazard Assessment
,C) Organization for Structural Health Accreditation
D) Occupational Standards and Housing Authority
Answer: A) Occupational Safety and Health Administration
Rationale: OSHA is the federal agency responsible for ensuring safe
and healthful working conditions in the U.S.
Image Label Idea: OSHA logo with workers wearing safety gear.
6. A project schedule using bars to represent tasks over time is
called:
A) Critical Path Method
B) Gantt Chart
C) PERT Chart
D) Flow Diagram
Answer: B) Gantt Chart
Rationale: A Gantt chart is a visual project management tool that
shows tasks as bars along a timeline.
Image Label Idea: Sample Gantt chart with labeled tasks and dates.
7. Which type of insurance protects the contractor from lawsuits
due to property damage or injuries?
A) Workers’ compensation
B) Liability insurance
C) Builder’s risk insurance
D) Performance bond
Answer: B) Liability insurance
Rationale: Liability insurance covers damages to third parties caused
by construction operations.
Image Label Idea: Contractor signing a liability insurance policy.
, 8. When calculating profit margin, which formula is correct?
A) Profit ÷ Revenue × 100
B) Revenue ÷ Cost × 100
C) Revenue − Cost ÷ Revenue × 100
D) Cost − Revenue ÷ Cost × 100
Answer: A) Profit ÷ Revenue × 100
Rationale: Profit margin represents profit as a percentage of total
revenue.
Image Label Idea: Pie chart showing cost vs profit percentages.
9. Which of the following is a type of contract where the contractor
is paid for actual costs plus a fee?
A) Lump-sum contract
B) Cost-plus contract
C) Unit price contract
D) Time and material contract
Answer: B) Cost-plus contract
Rationale: A cost-plus contract reimburses the contractor for actual
expenses plus a predetermined fee or percentage.
Image Label Idea: Contract labeled “Cost-Plus” with cost items and
fee highlighted.
10. Which soil test is most commonly performed to determine the
bearing capacity of the ground?
A) Soil resistivity test
B) Standard Penetration Test (SPT)
and Answers | 2026 Update | 100% Correct – GT.
1. Which of the following is the primary purpose of a building
permit?
A) To increase property value
B) To ensure compliance with building codes
C) To guarantee construction quality
D) To provide funding for the project
Answer: B) To ensure compliance with building codes
Rationale: Building permits are issued to ensure that construction
meets safety and zoning regulations and complies with local building
codes.
Image Label Idea: A city official reviewing a building permit
application with a construction site in the background.
2. A contractor is required to have which of the following to legally
operate?
A) Liability insurance only
B) General contractor license
C) Workers’ compensation only
D) Project financing
Answer: B) General contractor license
Rationale: A valid general contractor license is required to legally bid,
contract, and perform construction work in most jurisdictions.
Image Label Idea: A certificate labeled “General Contractor License”
displayed in an office.
,3. What is the primary responsibility of a general contractor on a
construction project?
A) Performing all labor tasks themselves
B) Supervising and coordinating subcontractors and construction
activities
C) Providing architectural design services
D) Selling construction materials
Answer: B) Supervising and coordinating subcontractors and
construction activities
Rationale: The general contractor manages the project schedule,
ensures quality, oversees subcontractors, and coordinates resources.
Image Label Idea: Diagram showing GC at the center coordinating
electricians, plumbers, and carpenters.
4. Which of the following is considered a fixed cost in construction?
A) Labor paid per hour
B) Equipment rental
C) Permit fees
D) Concrete for foundation
Answer: C) Permit fees
Rationale: Fixed costs remain constant regardless of the size of the
project, such as permit fees, insurance, or salaried staff.
Image Label Idea: Permit invoice labeled “Fixed Cost” on a
construction desk.
5. What does OSHA stand for?
A) Occupational Safety and Health Administration
B) Office of Safety and Hazard Assessment
,C) Organization for Structural Health Accreditation
D) Occupational Standards and Housing Authority
Answer: A) Occupational Safety and Health Administration
Rationale: OSHA is the federal agency responsible for ensuring safe
and healthful working conditions in the U.S.
Image Label Idea: OSHA logo with workers wearing safety gear.
6. A project schedule using bars to represent tasks over time is
called:
A) Critical Path Method
B) Gantt Chart
C) PERT Chart
D) Flow Diagram
Answer: B) Gantt Chart
Rationale: A Gantt chart is a visual project management tool that
shows tasks as bars along a timeline.
Image Label Idea: Sample Gantt chart with labeled tasks and dates.
7. Which type of insurance protects the contractor from lawsuits
due to property damage or injuries?
A) Workers’ compensation
B) Liability insurance
C) Builder’s risk insurance
D) Performance bond
Answer: B) Liability insurance
Rationale: Liability insurance covers damages to third parties caused
by construction operations.
Image Label Idea: Contractor signing a liability insurance policy.
, 8. When calculating profit margin, which formula is correct?
A) Profit ÷ Revenue × 100
B) Revenue ÷ Cost × 100
C) Revenue − Cost ÷ Revenue × 100
D) Cost − Revenue ÷ Cost × 100
Answer: A) Profit ÷ Revenue × 100
Rationale: Profit margin represents profit as a percentage of total
revenue.
Image Label Idea: Pie chart showing cost vs profit percentages.
9. Which of the following is a type of contract where the contractor
is paid for actual costs plus a fee?
A) Lump-sum contract
B) Cost-plus contract
C) Unit price contract
D) Time and material contract
Answer: B) Cost-plus contract
Rationale: A cost-plus contract reimburses the contractor for actual
expenses plus a predetermined fee or percentage.
Image Label Idea: Contract labeled “Cost-Plus” with cost items and
fee highlighted.
10. Which soil test is most commonly performed to determine the
bearing capacity of the ground?
A) Soil resistivity test
B) Standard Penetration Test (SPT)
