Free ARE Practice Management Practice Test

Correct answer: C.

Paid time is 6 × 40 × 4 = 960 hours. Keeping the 20% reserve leaves 960 × 0.80 = 768 project hours. Existing work uses 650, leaving 118. The new work needs 140, so the firm is 22 hours short.

• A forgets the reserved time (960 − 650 = 310).
• B is wrong because 650 is less than 768.
• D relabels hours without creating any capacity.

AIA's project-fit checklist asks whether the firm has the staff to finish in the client's time frame before it commits.

Source: AIA Best Practices, “Reality check: Assess whether a project is for you”, p. 3, Section E, “Location and available staff”.

Correct answer: B.

Rule 3.102 lets members take on services when they, together with the consultants they engage, are qualified. A qualified consultant closes the gap.

• A risks practicing outside competence on a technical specialty.
• C silently drops a service the building needs.
• D isn't required when qualified help is available.

Source: AIA Code of Ethics and Professional Conduct, 2024 edition, p. 3, Rule 3.102.

Correct answer: A.

NCARB's Guidelines say you must earn a license from the jurisdiction where you intend to practice, and that an NCARB Certificate helps architects apply for reciprocal licensure. Licenses aren't national (B), a contractor’s license alone does not authorize an architectural seal (C), and reciprocity doesn't mean retaking the ARE (D). Firm-registration rules vary, so check the state board.

Source: NCARB, ARE 5.0 Guidelines (effective Oct 1, 2026), pp. 5–6; NCARB, “Apply for a Reciprocal License”, “How to Apply for a Reciprocal License”; NCARB, Licensing Requirements Tool, jurisdiction selection.

Correct answer: D.

The Department of Labor’s regulations state that job titles don’t determine exemption. The learned-professional exemption requires qualifying compensation on a salary or fee basis and a primary duty involving advanced knowledge in a field of science or learning, customarily acquired through specialized intellectual instruction. The duties must involve the consistent exercise of discretion and judgment. A degree alone (C) isn’t enough, and a written waiver (B) does not substitute for the exemption requirements.

Source: 29 CFR §541.2 — Job titles insufficient, §541.2; 29 CFR §541.300 — Professional employees, §541.300(a)(1); 29 CFR §541.301 — Learned professionals, §541.301(a)–(d).

Correct answer: A.

ADA Title I covers qualifying employers with 15 or more employees for each working day in at least 20 calendar weeks in the current or preceding calendar year and requires reasonable accommodation for qualified individuals unless it causes undue hardship. A modified schedule can be an accommodation; the obligation is to provide an effective reasonable accommodation, not automatically every schedule an employee requests. Title III (B) covers public accommodations, not employment. C gives the wrong threshold. State laws can apply to smaller firms, so a firm under 15 should still check its state.

Source: Americans with Disabilities Act, as amended (ADA.gov), 42 U.S.C. §§12111(5)(A), (8), (9)(B), and 12112(b)(5)(A).

Correct answer: C.

Rule 2.105: when a member learns of a client or employer decision that violates law and will materially and adversely affect public safety in the finished project, the member must advise against it, refuse to consent, and report it to the local building inspector or other enforcing official, unless the member can resolve it satisfactorily another way. A and D leave the violation in place; B skips the reporting duty.

Source: AIA Code of Ethics and Professional Conduct, 2024 edition, p. 2, Rule 2.105.

Correct answer: D.

Rule 3.201 bars services where the member's judgment could be affected by the member's own interests, unless everyone relying on that judgment consents after full disclosure. Suitability (A) or price (C) doesn't cure the conflict, and the nominal transfer in B keeps the financial benefit while hiding it.

Source: AIA Code of Ethics and Professional Conduct, 2024 edition, p. 3, Rule 3.201.

Correct answers: A, B, C, F.

Rule 5.302: members leaving a firm shall not, without permission, take designs, drawings, data, reports, notes, or other materials relating to the firm's work, whether or not the member did that work. Renderings (B), master specs (C), and fee data (F) are firm work product. The personally owned code copy (D) and personal CE certificates (E) aren't firm work product in this scenario.

Source: AIA Code of Ethics and Professional Conduct, 2024 edition, p. 4, Rule 5.302.

Correct answer: B.

B101–2017 §2.2 sets the duty at the skill and care ordinarily provided by architects in the same or similar locality under the same or similar circumstances. The law doesn't require perfection, and AIA recommends discussing expectations early in negotiations. “Highest standard” promises more than that ordinary-practice benchmark.

• A misstates B101.
• C prices the risk instead of fixing it.
• D doesn't remove the duty; a professional is still measured against ordinary practice.

Source: AIA, “Standard of care: Confronting errors & omissions up front” (Nov 2023), “Mutual project expectation”; AIA B101–2017, in the official 2007/2017 comparison, p. 3, §2.2.

Correct answer: A.

AIA warns that owner-drafted indemnity clauses often reach beyond what the law would otherwise require, may be uninsurable, and can require paying the owner's defense costs even when the architect isn't at fault. Professional liability coverage is subject to its terms; contractual liability beyond covered professional negligence may not be insured (B is wrong). A bigger fee (C) doesn't cap the exposure, and a silent edit (D) isn't a negotiated agreement.

Source: AIA, “Why architects should be wary of indemnification clauses” (Feb 2018), “Indemnification clause risks,” paragraphs beginning “First” and “Second”.

Correct answer: D.

Break-even multiplier = 1 + overhead rate = 2.70, so the cost to cover is $40 × 2.70 = $108/hour. A 20% margin means profit is 20% of the billing rate, so cost must be 80% of it: $108 ÷ 0.80 = $135. Check: ($135 − $108) ÷ $135 = 20%.

• A applies only the overhead rate ($40 × 1.70).
• B is break-even with no profit.
• C marks cost up by 20% ($108 × 1.20), which yields a margin of only about 16.7% ($21.60 ÷ $129.60).

Source: AIA, “Accounting basics: The income statement & KPIs” (Dec 2023), overhead rate and break-even rate.

Correct answer: B.

Working capital = current assets − current liabilities = $240,000 − $150,000 = $90,000. AIA points out that receivables aren't cash, and only cash pays salaries, so a healthy working-capital figure can hide a cash shortage. A treats working capital as cash, C adds instead of subtracting, and D confuses working capital with cash.

Source: AIA, “Accounting basics: The balance sheet & KPI” (Dec 2023), working capital.

Correct answer: C.

Utilization here is charged hours ÷ paid hours. Production staff: project architect 410 ÷ 520 = 78.8%, Designer A 440 ÷ 520 = 84.6%, Designer B 350 ÷ 520 = 67.3%. Only Designer B is under 75%. The principal (40.4%) and office manager (5.8%) are lower, but the stem excludes them; picking the lowest number without checking who the target covers is the trap.

Source: AIA Best Practices, “Budgeting key performance indicators”, pp. 2–3, utilization and role-dependent non-project work; this item explicitly uses hours.

Correct answer: A.

Net multiplier = $2,400,000 ÷ $800,000 = 3.00. Break-even rate = 1 + 1.75 = 2.75. Overhead = 1.75 × $800,000 = $1,400,000, so operating profit = $2,400,000 − $800,000 − $1,400,000 = $200,000. Overhead larger than direct labor (C) does not by itself mean a loss; a loss occurs when the net multiplier falls below break-even.

Source: AIA, “Accounting basics: The income statement & KPIs” (Dec 2023), net multiplier, overhead rate, break-even rate.

Correct answer: D.

Under the specified claims-made-and-reported policy, the date the work was performed is not enough: the claim also has to meet the policy’s claims and reporting conditions. Here it was first made after coverage ended, with no applicable extension or earlier report. An Extended Reporting Period (“tail”) can extend reporting coverage for eligible claims, subject to the policy. A describes occurrence-based reasoning. C does not establish coverage under the expired professional liability policy, and the stem rules out replacement coverage. B invents an automatic period.

Source: Victor, “Facing the Future: Smooth Transitions for Small Design Firms” (March 19, 2025), p. 6, slides 16–18.

Correct answers: B, C, E, F.

§9.5 (termination for convenience on at least seven days' notice), §9.1 (seven days' notice before suspending for nonpayment), §8.2.1 (mediation first), and §8.1.3 (mutual waiver of consequential damages) are standard terms. A is false: §6.2 says the architect cannot and does not warrant that bids will match the budget. D is false: §4.2.1 requires prior written authorization for its listed services; §4.2.2 addresses specified services needed to avoid construction delay, with prompt notice.

Source: AIA B101–2017, in the official 2007/2017 comparison, pp. 11–12, §§4.2.1–4.2.2; p. 14, §6.2; p. 16, §§8.1.3, 8.2.1; p. 17, §§9.1, 9.5; AIA, Instructions: G801–2017, Notice of Additional Services, “Completing G801”.

Correct answer: C.

The Copyright Office defines an architectural work as the design of a building embodied in any tangible medium, including the building itself, for works created on or after December 1, 1990. Under 17 U.S.C. §408(a), registration isn't a condition of protection, though it matters for enforcement steps. A, B, and D contradict those sources. Whether this builder infringed would turn on the facts, so a firm in this spot should talk to an attorney.

Source: U.S. Copyright Office, Circular 41 (rev. Mar 2021), pp. 1–2; U.S. Copyright Office, Copyright Act §408(a), §408(a).

Correct answer: A.

Rule 2.102 bars offering or making any payment or gift to a public official with the intent of influencing the official's judgment on a prospective or existing project in which the member is interested. The Code sets no dollar safe harbor (B), and disclosure (C) doesn't cure the intent. Ordinary marketing (D) does not excuse the influence-seeking gift described here.

Source: AIA Code of Ethics and Professional Conduct, 2024 edition, p. 2, Rule 2.102.

Correct answer: D.

Rule 4.201 bars misleading, deceptive, or false claims about professional qualifications, experience, or performance, and requires members to accurately state the scope and nature of their responsibilities on work they claim credit for. A, C, and B overstate or blur her role.

Source: AIA Code of Ethics and Professional Conduct, 2024 edition, p. 3, Rule 4.201.

Correct answer: B.

B101 §4.2.1.1 covers services caused by changes to the owner’s previous approvals or a material change in project size. The architect must obtain the owner’s written authorization before proceeding with those services; Article 4 also addresses compensation and schedule adjustments. A skips authorization, C gives away fee, and D is unnecessary.

Source: AIA B101–2017, in the official 2007/2017 comparison, p. 11, §§4.2–4.2.1.1; AIA, Instructions: G801–2017, Notice of Additional Services, “Completing G801”.

Correct answer: C.

A fixed fee is only as reliable as the scope behind it. B101 is built around agreed initial information and allocated services, and AIA's project-fit checklist asks whether the firm can produce the work on the client's schedule before committing. A prices unknowns, B surprises the client after acceptance, and D starts work with no agreement on scope or fee.

Source: AIA Contract Documents, “Summary: B101–2017”, Article 1 and Supplemental/Additional Services; AIA Best Practices, “Reality check: Assess whether a project is for you”, pp. 2–3, project viability and available staff.

Correct answer: D.

In design-build, one entity is responsible for both design and construction under a single contract with the owner. When the architect and design-builder are separate companies, the architect typically contracts with the design-builder (AIA's B143), not the owner. A describes design-bid-build or CM delivery; C is the CM-as-adviser model.

Source: AIA Contract Documents, “AIA Contract Documents by delivery method”, Design-Build.

Correct answer: A.

In design-bid-build, the owner contracts separately with the architect for design and with the contractor for construction, and the contractor is brought on after the design is done. B places design and construction responsibility with one entity. C specifically introduces a construction manager during schematic design, and D adds the construction manager the district doesn't want.

Source: AIA Contract Documents, “AIA Contract Documents by delivery method”, Design-Bid-Build.

Correct answer: B.

B101 §6.5: when the estimate exceeds the budget, the architect makes recommendations to adjust the project's size, quality, or budget, and the owner cooperates. Staying silent (C) lets a known risk grow. A guarantee (D) contradicts §6.2, where the architect does not warrant bids.

Source: AIA B101–2017, in the official 2007/2017 comparison, p. 14, §§6.2, 6.5.

Correct answers: A, C, E, F.

B101 §6.6 lists approving a budget increase, rebidding or renegotiating, terminating under §9.5, and revising scope in consultation with the architect (plus other mutually acceptable alternatives). The budget overrun alone does not require the architect to fund the difference (B) or authorize withholding earned fees (D).

Source: AIA B101–2017, in the official 2007/2017 comparison, p. 14, §6.6.

Correct answer: A.

AIA's B101 summary explains that Supplemental Services are non-basic services the architect agrees to at signing. Additional Services now refer only to services that come up as the project proceeds (C). Basic Services are performed in five standard phases; the agreed services here extend beyond those described in Article 3 (B).

Source: AIA Contract Documents, “Summary: B101–2017”, Supplemental and Additional Services; AIA B101–2017, in the official 2007/2017 comparison, pp. 9–11, §§4.1.1, 4.1.1.28, 4.1.3.

Correct answer: D.

Rule 3.301 bars members from intentionally or recklessly misleading clients about the results their services can achieve. Certification depends on many parties, including the contractor and the certifying body, so a guarantee overpromises (A, C). Declining (B) isn't required.

Source: AIA Code of Ethics and Professional Conduct, 2024 edition, p. 3, Rule 3.301; AIA, Instructions: E204–2017, Sustainable Projects Exhibit, §§2.4.1, 2.7, 6.1.

Correct answer: B.

The IRS allows S corporation shareholders to be individuals, certain trusts, and estates, not partnerships or corporations. The limit is 100 shareholders, not two (A). Check architecture-firm ownership requirements with the applicable licensing board separately.

Source: IRS, “S corporations”, “To qualify for S corporation status”; NCARB, Licensing Requirements Tool, jurisdiction selection for the separate licensing-board check.

Correct answer: C.

The SBA explains that a sole proprietorship isn't a separate entity, so the owner can be personally liable for business obligations, while an LLC protects owners from personal liability in most instances. Entity protection has limits; this question concerns the stated lease-debt scenario.

Source: SBA, “Launch your business,” Choose a business structure, “Sole proprietorship” and “Limited liability company (LLC)”.

Correct answer: C.

The SBA notes that C corporations pay income tax on profits, and those profits can be taxed again when paid to shareholders as dividends. A sole proprietor (A) reports business income directly, and an S corporation (D) generally passes income through to shareholders. An LLC under the default federal rules (B) is a disregarded entity or partnership, rather than a corporation by election.

Source: SBA, “Launch your business,” Choose a business structure, “Corporation — C corp”; IRS, “S corporations”, opening explanation of pass-through income; IRS Publication 3402, Taxation of Limited Liability Companies (March 2020), “Default classification”.

Correct answer: A.

AIA's guidance separates ownership (an equity stake) from leadership, says every owner needs strong leadership skills, notes that transitions can run over several years, and urges firms to identify, train, and mentor future leaders. Buying shares (B) doesn't transfer relationships or management ability. C separates ownership from control in a way that won't survive the founders leaving, and D leaves no time to prepare.

Source: AIA, “Pathways to firm ownership & leadership” (Dec 2023), “Ownership, leadership, & governance” and leadership-transition discussion.

Correct answer: B.

AIA's B101 summary says that if the owner identifies a Sustainable Objective, the parties should use E204–2017, Sustainable Projects Exhibit, to establish the Sustainability Plan process. A201 is the construction general conditions, C401 is the architect–consultant agreement, and G702 is a payment application.

Source: AIA Contract Documents, “Summary: B101–2017”, “Related documents”; AIA B101–2017, in the official 2007/2017 comparison, p. 2, §1.1.6.1.

Correct answer: D.

AIA's summary notes that before transmitting Instruments of Service or other information in digital form, the parties should set transmission protocols. C conflicts with B101's Article 7 copyright and license terms, and B isn't a B101 default.

Source: AIA B101–2017, in the official 2007/2017 comparison, p. 3, §1.3; pp. 15–16, Article 7; AIA Contract Documents, “Summary: B101–2017”, Article 1, digital protocols.

Correct answer: A.

FAR 36.602-3 and 36.602-4 require a preference ranking of the most highly qualified firms, with the evaluation board recommending at least three. FAR 36.606 requires negotiating a fair and reasonable fee with the top firm and, if that fails, formally ending talks and moving to the next. Price isn’t the basis for the qualifications ranking (B, C).

Source: Federal Acquisition Regulation, Subpart 36.6 — Architect-Engineer Services, 36.601-1; 36.602-3(c)–(d), 36.602-4(b), 36.606(a), (f).

Correct answers: B, D, F.

AIA's risk guidance says an in-house quality-control program can reduce professional liability exposure, ties many problems to poor communication between the prime design firm and its consultants, and warns that compressed schedules leave too little time for review, coordination, and checking. B, D, and F add independent review, planned coordination, and follow-through. A makes the cause worse, C removes the coordination that failed, and E drops review entirely while waiting on a tool.

Source: AIA Best Practices, “Risky business: Managing the top five hazards”, pp. 1–2, “Five problem areas,” “Failure to communicate between the prime professional and consultants,” and “Lack of quality control on design changes”.

Correct answer: C.

Labor-cost utilization = direct labor cost ÷ total labor cost = $900,000 ÷ $1,500,000 = 60%. B is the indirect share ($600,000 ÷ $1,500,000). A divides direct labor by total revenue, and D flips the ratio.

Source: AIA, “Accounting basics: The income statement & KPIs” (Dec 2023), utilization rate.

Correct answer: B.

Net revenue = $3,400,000 − $520,000 − $80,000 = $2,800,000. Net multiplier = $2,800,000 ÷ $900,000 ≈ 3.11. Overhead rate = $1,530,000 ÷ $900,000 = 1.70, so break-even = 1 + 1.70 = 2.70. A uses total revenue ($3,400,000 ÷ $900,000 ≈ 3.78), and D forgets to add 1 to the overhead rate.

Source: AIA, “Accounting basics: The income statement & KPIs” (Dec 2023), net multiplier, overhead rate, break-even rate.

Correct answer: D.

Operating profit = net revenue − direct labor − overhead = $2,800,000 − $900,000 − $1,530,000 = $370,000. $370,000 ÷ $2,800,000 ≈ 13.2%. A divides by total revenue ($3,400,000), C divides by direct labor ($900,000), and B subtracts overhead but forgets direct labor ($1,270,000 ÷ $2,800,000).

Source: AIA, “Accounting basics: The income statement & KPIs” (Dec 2023), operating profit.

Correct answer: B.

The proposed warranty would make Larkspur responsible for a construction price that the CM proposes and negotiates with the owner. In the standard A133–2019 arrangement, the CM becomes bound to complete construction at or below the accepted GMP; B133–2019 assigns cost estimating to the CM and contract administration to the architect. Larkspur should negotiate removal or revision of this warranty. T1 and T3 address termination and dispute procedures, and T4 describes preconstruction involvement; none imposes the same price warranty.

Source: AIA, Summary: A133–2019, Owner–Construction Manager as Constructor Agreement, Synopsis, GMP proposal/acceptance and construction obligations; AIA, Summary: B133–2019, Owner–Architect Agreement, CM as Constructor Edition, Synopsis and Purpose.

Correct answer: C.

The construction manager contracts directly with Kestrel to construct the project and, in the arrangement described, commits to the accepted GMP. Kestrel has a separate agreement with Larkspur for architectural services; B133 is the matching standard owner–architect form.

Source: AIA Contract Documents, “AIA Contract Documents by delivery method”, “Construction Manager as Constructor”; AIA, Summary: A133–2019, Owner–Construction Manager as Constructor Agreement, Synopsis; AIA, Summary: B133–2019, Owner–Architect Agreement, CM as Constructor Edition, Synopsis and Purpose.