Free Alabama Auctioneer Licensing Examination Practice Questions

Sample Practice Questions

Try these 10 sample questions from the Alabama Auctioneer Licensing Examination practice bank. Each includes the answer and explanation. Continue with the interactive practice above to review the full question set.

1. 1An Alabama auctioneer who belongs to the NAA receives its request for a written response to an accepted ethics complaint. What response period does the NAA grievance procedure specify?

   1. A.14 days
   2. B.21 days
   3. C.30 daysCorrect answer: C
   4. D.60 days

   Explanation: The grievance procedure states, "request that the accused Member provide a response in writing to such charges within 30-days." The auctioneer should submit the written response within that period. The other periods do not match this response requirement.

   Reference: National Auction Association Code of Ethics — Procedure for Grievance Against the Code of Ethics, response paragraph

2. 2The Alabama Board requests an auctioneer's auction records for inspection. What is the rule's maximum production period before failure to produce becomes grounds for administrative action?

   1. A.10 days
   2. B.21 days
   3. C.30 daysCorrect answer: C
   4. D.60 days

   Explanation: The controlling text states, "Failure to produce requested documents, books, records, or copies thereof, within thirty (30) days will be grounds for administrative action by the board." Thirty days is the stated production limit. The other periods are not this rule's threshold.

   Reference: Alabama Auctioneers Administrative Rules — Rule 150-X-1-.09, Inspection of Records

3. 3An Alabama auctioneer reviews a proposed sale of goods. Assuming no statutory exception applies, at what minimum price does §7-2-201(1) require a sufficient signed record for enforcement?

   1. A.$100
   2. B.$250
   3. C.$500Correct answer: C
   4. D.$1,000

   Explanation: The statute states, "a contract for the sale of goods for the price of five hundred dollars ($500) or more is not enforceable by way of action or defense unless there is a record sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by the party’s authorized agent or broker." The minimum threshold is $500. Higher prices also fall within the rule but are not the starting threshold.

   Reference: Code of Alabama, 7-2-201(1) — §7-2-201(1)

4. 4A seller privately restricts an Alabama auctioneer's authority. A bidder has actual notice of that restriction before dealing with the auctioneer. What is the effect of that notice under §8-2-1?

   1. A.The bidder can rely on unrestricted ostensible authority.
   2. B.The bidder is subject to the restriction on authority.Correct answer: B
   3. C.The restriction becomes effective after the sale closes.
   4. D.The restriction applies to the seller but not the bidder.

   Explanation: The statute states, "has even then such authority ostensibly, except as to persons who have actual or constructive notice of the restrictions upon his authority." A person with notice cannot rely on ostensible authority contrary to the known restriction.

   Reference: Code of Alabama, 8-2-1 — §8-2-1

5. 5At an Alabama equipment auction, a new bid arrives while the hammer is falling to accept a prior bid. Who has statutory discretion to decide whether to reopen bidding or declare the sale under the prior bid?

   1. A.The auctioneerCorrect answer: A
   2. B.The consignor
   3. C.The prior bidder
   4. D.The new bidder

   Explanation: The statute states, "Where a bid is made while the hammer is falling in acceptance of a prior bid the auctioneer may in his discretion reopen the bidding or declare the goods sold under the bid on which the hammer was falling." This procedural discretion belongs to the auctioneer, not the consignor or either competing bidder.

   Reference: Alabama Commercial Code, Sale by Auction — §7-2-328(2)

6. 6An individual Alabama auctioneer prepares a newspaper advertisement for a particular auction that the auctioneer will conduct without apprentices. Which identification must appear?

   1. A.The auctioneer's name and state license numberCorrect answer: A
   2. B.The auctioneer's name and county tax number
   3. C.The auctioneer's name and surety policy number
   4. D.The auctioneer's name and federal tax number

   Explanation: The source states, "Any advertisements for auction sale must identify the name and license number of the auctioneer and any apprentices who will be conducting the auction business." The rule requires the auctioneer's licensing identification; tax and surety numbers do not replace the state license number.

   Reference: Alabama Auctioneers Administrative Rules — Rule 150-X-1-.03(a)

7. 7An Alabama seller asks to set a minimum bid and retain the right to reject bids before completion. Which auction classification fits those instructions?

   1. A.Auction without reserve
   2. B.Absolute auction
   3. C.Auction with reserveCorrect answer: C
   4. D.Estate auction

   Explanation: The source states, "Auction With Reserve: An auction in which the seller or his agent reserves the right to establish a minimum bid, to accept or reject any and all bids and to withdraw the property at any time prior to the completion of the sale by the auctioneer." A reserve auction preserves those rights. Absolute and without-reserve describe the contrary treatment; estate describes property provenance rather than the requested reserve rights.

   Reference: Alabama Auctioneers Administrative Rules — Rule 150-X-1-.01(6)

8. 8An auctioneer earns a commission in December but receives payment in January. Under the accrual method, in which tax year is that income generally reported?

   1. A.The year the commission is earnedCorrect answer: A
   2. B.The year the commission is received
   3. C.The year the payment is deposited
   4. D.The year the commission is spent

   Explanation: IRS Publication 583 states, "Under an accrual method, you generally report income in the tax year you earn it, even though you may receive payment in a later year." Accrual focuses on earning, rather than receipt, deposit or later expenditure.

   Reference: IRS Publication 583 — Choosing an Accounting Method, Accrual method

9. 9An auction agreement sets the seller's commission at 12% of a $7,500 hammer price. No other charge affects the commission base. What commission is earned?

   1. A.$90
   2. B.$625
   3. C.$900Correct answer: C
   4. D.$6,600

   Explanation: DOE Fundamentals Handbook Mathematics, Volume 1 states, "Any number written as a percent may be written as a decimal. To change a percent to a decimal, drop the percent symbol and divide by 100." 12% = 12/100 = 0.12; $7,500 × 0.12 = $900. $90 shifts the decimal an extra place; $625 divides by 12 instead of multiplying by 0.12; $6,600 is the proceeds after subtracting commission.

   Reference: DOE Fundamentals Handbook Mathematics, Volume 1 — Module 1, Percentages, Changing a Percent to a Decimal

10. 10An Alabama auctioneer holds proceeds owed to a seller. What is the statutory outer limit for accounting for or remitting the seller's money after it comes into the auctioneer's possession?

    1. A.21 days
    2. B.30 daysCorrect answer: B
    3. C.60 days
    4. D.90 days

    Explanation: The controlling text states, "Failing to account for or remit, within 30 days, any money belonging to others that comes into his or her possession" The statutory limit is 30 days. Earlier accounting is permissible, but 21 days is not the stated outer limit; 60 and 90 days exceed it.

    Reference: Code of Alabama, Auctioneers License Act — §34-4-29(b)(4)