Business and Society Exam
Materials
Course Introduction
Business and Society examines the complex relationships between businesses, governments, and communities within a global context. The course explores topics such as corporate social responsibility, ethical decision-making, stakeholder management, environmental sustainability, and the impact of regulation and globalization on business practices. Through case studies and critical analysis, students learn how businesses interact with societal expectations and address social, ethical, and environmental challenges, preparing them to navigate the evolving landscape of modern business and contribute positively to society.
Recommended Textbook
Business Law and the Legal Environment 21st Edition by David P. Twomey
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52 Chapters
2751 Verified Questions
2751 Flashcards
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Page 2
Chapter 1: The Nature and Sources of Law
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56 Verified Questions
56 Flashcards
Source URL: https://quizplus.com/quiz/39898
Sample Questions
Q1) Your private life is protected from intrusions by other people by:
A) the Fourth Amendment of the United States Constitution.
B) the Equal Protection Clause.
C) court decisions of the United States Supreme Court.
D) local ordinance.
Answer: C
Q2) Legal principles expressed for the first time in court decisions are called:
A) statutory law.
B) stare decisis.
C) common law.
D) precedent.
Answer: D
Q3) The right to be secure against unreasonable searches and seizures conducted by the police is guaranteed by state statute.
A)True
B)False
Answer: False
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Chapter 2: The Court System and Dispute Resolution
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57 Verified Questions
57 Flashcards
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Sample Questions
Q1) The federal court system consists of three levels.
A)True
B)False
Answer: True
Q2) Once a lawsuit is commenced, the case must go to the jury.
A)True
B)False
Answer: False
Q3) The federal court system consists of ____ level(s) of courts.
A) one
B) two
C) three
D) four
Answer: C
Q4) The power given to courts to hear certain types of cases is called:
A) jurisdiction.
B) mediation.
C) arbitration.
D) summary judgment.
Answer: A
Page 4
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Chapter 3: Business Ethics, Social Forces, and the Law
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52 Verified Questions
52 Flashcards
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Sample Questions
Q1) Economic growth tends to be fastest among developing countries where payments to key administrators can increase transaction efficiency.
A)True
B)False
Answer: False
Q2) Under United States law, the legal owner (titleholder) of property is free to engage in any use of the property that he or she may desire.
A)True
B)False
Answer: False
Q3) Voluntary improvements in the fairness and ethics of business behavior are:
A) less effective than those brought about by government regulation.
B) less costly and intrusive than those brought about by government regulation.
C) virtually nonexistent in corporate America.
D) more common in third-world countries than in the United States.
Answer: B
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Chapter 4: The Constitution As the Foundation of the Legal Environment
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57 Verified Questions
57 Flashcards
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Sample Questions
Q1) Which of the following powers is not reserved solely to the national government?
A) power to regulate interstate commerce
B) power to tax
C) power to coin money
D) power to borrow money on the credit of the United States
Q2) A school district supplied school bus service for all children 12 years of age or under who lived at least one mile from school. This service was provided for transportation to and from school. Joanna was a 13-year-old student who lived in that school district. Joanna's home was 1.2 miles from school. Her parents brought suit against the school district alleging that Joanna was entitled to school bus service and the failure to provide such service denied her the equal protection of the law. Discuss the probable outcome of the lawsuit.
Q3) The "living" Constitution has which of the following characteristics?
A) strong federal government
B) a strong president
C) diminution of state powers relative to those of the federal government
D) all of the above
Q4) Administrative agencies are, in effect, a fourth branch of the government.
A)True
B)False
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Chapter 5: Government Regulation of Competition and
Prices
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48 Verified Questions
48 Flashcards
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Sample Questions
Q1) __________ laws seek to guard against unfairness in corporate takeover situations.
A) Interceder
B) Invader
C) Raider
D) Takeover
Q2) The Federal Trade Commission administers the law prohibiting unfair methods of competition.
A)True
B)False
Q3) The government may require licenses to be able to deal in certain goods, and these licenses may be revoked for improper conduct or violations of statutes and regulations.
A)True
B)False
Q4) A state may prohibit a seller from selling below cost if the purpose is to harm competitors.
A)True
B)False
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Chapter 6: Administrative Agencies
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58 Verified Questions
58 Flashcards
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Sample Questions
Q1) The United States constitution places the most significant limitations on administrative investigation in the area of:
A) search and seizure of the person.
B) aerial inspection.
C) search and seizure of papers and records.
D) guarantee against self-incrimination.
Q2) An administrative agency whose erroneous decision causes a regulated person or enterprise substantial loss is liable for such loss regardless of whether the agency acted in good faith.
A)True
B)False
Q3) Until proven valid, a rule adopted by an administrative agency is invalid.
A)True
B)False
Q4) Administrative agencies must be rigidly controlled and cannot be granted discretionary authority.
A)True
B)False
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Page 8
Chapter 7: The Legal Environment of International Trade
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57 Verified Questions
57 Flashcards
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Sample Questions
Q1) The WTO provides a Dispute Settlement Body (DSB) to enable member countries to resolve trade disputes rather than engage in unilateral trade sanctions or a trade war.
A)True
B)False
Q2) You plan to enter the export market with a new product that you have just developed. You feel that the product has great promise, but you are confused over whether you are required to obtain an export license. Further, your brother-in-law says that he knows someone in the Japanese government who could greatly assist you in your endeavors for a very modest fee. Discuss this situation.
Q3) In antidumping cases:
A) The International Trade Administration determines whether foreign goods are being sold in the United States at less than fair value (LTFV).
B) The International Trade Commission determines if there is an injury to a U.S. industry as a result of such sales.
C) Remedial action will be taken only if findings of both LTFV sales and injury are present.
D) All of the above
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Chapter 8: Crimes
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57 Verified Questions
57 Flashcards
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Sample Questions
Q1) A crime generally consists of:
A) an act.
B) an act or omission.
C) a mental state and an act or omission.
D) a mental state and harm.
Q2) The Foreign Corrupt Practices Act applies to businesses with their principal offices located in the United States.
A)True
B)False
Q3) The criminal law of all states is the same because all states have adopted a uniform criminal code.
A)True
B)False
Q4) "Mental state" does not require an awareness of guilt.
A)True
B)False
Q5) Bribery requires the use of violence.
A)True
B)False
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Chapter 9: Torts
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58 Verified Questions
58 Flashcards
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Sample Questions
Q1) The widest range of tort liability arises in the area of:
A) negligence.
B) absolute liability.
C) violation of statute.
D) assumption of risk.
Q2) Torts are classified as:
A) intentional only.
B) negligence only.
C) strict liability only.
D) intentional, negligence, and strict liability.
Q3) Defamation of a public figure requires what additional element?
A) intent
B) malice
C) causation
D) none of the above
Q4) An absolute privilege is available as a defense to slander liability when:
A) the statement is made to only a few people.
B) libel exists.
C) a witness testifies in a court proceeding.
D) no intent to harm is present.
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Chapter 10: Intellectual Property Rights
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52 Verified Questions
52 Flashcards
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Sample Questions
Q1) The Semiconductor Chip Protection Act of 1984 created a new form of industrial intellectual property by protecting mask works and the semiconductor chip products in which they are embodied against chip piracy.
A)True
B)False
Q2) In order to obtain a court order enjoining a competitor from using your trademark, it is necessary to show that:
A) you invested a certain level of resources to develop the mark.
B) the competitor is making unfair profits from use of the mark.
C) the competitor's use of the mark risks confusing the public.
D) all of the above.
Q3) Computer programs are subject to protection in the U.S. under:
A) copyright laws.
B) patent laws.
C) trade secret laws.
D) all of the above.
Q4) Computer programs are subject to trade secrets protection.
A)True
B)False
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Chapter 11: Cyberlaw
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52 Verified Questions
52 Flashcards
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Sample Questions
Q1) The distinction between offer and acceptance is no longer relevant in cyberlaw.
A)True
B)False
Q2) Employers have access and control rights to their employees' e-mail.
A)True
B)False
Q3) The Internet has facilitated access to capital markets.
A)True
B)False
Q4) The formation of contracts in cyberspace is governed today largely by:
A) international contract law principles.
B) traditional contract law principles.
C) federal contract law principles.
D) uniform state laws.
Q5) __________-sign is a federal law that recognizes digital signatures as authentic for purposes of contract formation.
A) Cyber
B) We
C) You D) E
Page 13
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Chapter 12: Nature and Classes of Contracts: Contracting on
the Internet
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53 Verified Questions
53 Flashcards
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Sample Questions
Q1) A void contract is one that is otherwise valid but may be rejected or set aside by one of the parties.
A)True
B)False
Q2) Quasi contracts are contracts.
A)True
B)False
Q3) A contract of record arises when the accountant of one of the parties has made an entry of the contract in the business record of that party.
A)True
B)False
Q4) With regard to a unilateral contract, the offeree does not accept the offer by express agreement, but rather by performance.
A)True
B)False
Q5) When a contract sets a price for services rendered, a plaintiff cannot sue for reasonable value.
A)True B)False
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Chapter 13: Formation of Contracts: Offer and Acceptance
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53 Verified Questions
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Sample Questions
Q1) The bid of each contractor for a job is considered an offer.
A)True
B)False
Q2) A customer went into a store and saw a beautiful leather jacket bearing a price tag of $29. The customer handed the cashier a $50 bill and said, "I accept. We have a deal." The cashier then noticed the price tag and told the customer an error had been made and that the price was $229. In this case:
A) the customer validly accepted the store's offer.
B) the price tag was a firm offer.
C) no contract was formed because the customer's offer was refused.
D) the customer is the offeree.
Q3) An offer gives the offeror the power to bind the offeree by contract.
A)True B)False
Q4) Social invitations can be offers. A)True
B)False
Q5) A requirements contract is too vague to be a legally-enforceable agreement. A)True
B)False
Page 15
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Chapter 14: Capacity and Genuine Assent
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44 Verified Questions
44 Flashcards
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Sample Questions
Q1) The "necessaries" of minors are precisely defined by law.
A)True
B)False
Q2) A party who speaks with a reckless disregard for the truth not knowing of the falsity of his or her words cannot be liable for fraud.
A)True
B)False
Q3) The maximum amount of time that a minor has to disaffirm a contract is:
A) one year from the date of the agreement.
B) 30 days from learning of his or her right to disaffirm.
C) the age of majority.
D) a reasonable period of time after reaching the age of majority.
Q4) An agreement is not binding when:
A) one party makes a mistake regarding a material fact.
B) both parties make a mistake regarding a material fact.
C) one party makes a mistake of law.
D) all of the above.
Q5) Discriminatory and punitive incapacities have largely disappeared.
A)True
B)False
Page 16
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Chapter 15: Consideration
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Sample Questions
Q1) Which of the following is not a necessary element of promissory estoppel?
A) The promisor and the promisee must engage in a bargained-for exchange.
B) The promisor must intend or should reasonably expect that the promisee will rely on the promise.
C) The promisee must in fact rely on the promise in some definite and substantial manner.
D) Enforcement of the promise is the only way to avoid injustice.
Q2) In a unilateral contract, the doing of a requested act is also the:
A) acceptance of the offer of the promisor.
B) detrimental reliance of the promisee.
C) detrimental reliance of the promisor.
D) none of the above.
Q3) Charitable subscriptions by which individuals make pledges to finance the construction of a college building, a church or another structure for charitable purposes are binding to the extent that the donor should have reasonably realized that the charity was relying on the promise in undertaking the building program.
A)True
B)False
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17
Chapter 16: Legality and Public Policy
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48 Verified Questions
48 Flashcards
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Sample Questions
Q1) Dealing honestly, reasonably, and in good faith:
A) is implied in every contract for services.
B) is implied in every contract for the sale of goods.
C) is an expressed obligation in every contract.
D) both a and b
Q2) One element involved in the determination of unconscionability is:
A) the comparative bargaining power of the parties.
B) the opportunity to make a contract for better terms with someone else.
C) the course of the economy after the contract is made.
D) whether a loss will be sustained by performance of the contract.
Q3) Private lotteries, which generally are held to be illegal, involve three elements:
A) prize, chance, and consideration.
B) return, skill, and wager.
C) prize, skill, and consideration.
D) attractive return, minimal involvement, and skill.
Q4) In every contract there exists an expressed covenant of good faith and fair dealing.
A)True
B)False
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Page 18
Chapter 17: Writing, Electronic Forms, and Interpretation of Contracts
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59 Verified Questions
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Sample Questions
Q1) Bart was a self-made millionaire who had earned his fortune by dedicated hard work. Bart had worked so hard that he never had developed much of a social life. Bart met Linda and fell in love with her. When Bart proposed to Linda, she told him that she needed time before making such an important decision. Pressing her for a favorable response, Bart telephoned Linda and promised her $100,000 if she would marry him. Linda then accepted the proposal.
Bart contracted with Quick Builders for the construction of a home Bart intended to move into with Linda after their marriage. Construction by Quick was not very quick because Quick was not paying subcontractors the sums that they were owed. They, in turn, were not completing their work. To expedite matters, Bart called the subcontractors and assured them that Bart would pay any sums that Quick Builders did not pay if they would complete the construction.
Bart and Linda married and the subcontractors completed the work. Quick Builders did not pay the subcontractors in full. Bart failed to pay Linda the $100,000. Both Linda and the subcontractors sued Bart. Discuss the probable outcome of the lawsuits.
Q2) Customs and trade usage can override the express provisions of a contract. A)True B)False
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Chapter 18: Third Persons and Contracts
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51 Verified Questions
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Sample Questions
Q1) Only written words that show an intention to transfer or assign will be given the effect of an assignment.
A)True B)False
Q2) In a contract in which a tenant borrowed money from a bank for the purpose of adding a bathroom to her apartment, the landlord is:
A) a direct beneficiary.
B) in privity of contract with the tenant.
C) a third-party beneficiary.
D) an incidental beneficiary.
Q3) In general, an assignee stands:
A) in a position subordinate to the assignor.
B) exactly in the position of the assignor.
C) in a position superior to the assignor.
D) in a position similar to, but not equal to, the assignor.
Q4) Persons who are not a party to a contract can never bring a suit based on that contract.
A)True B)False
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Chapter 19: Discharge of Contracts
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57 Verified Questions
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Sample Questions
Q1) Sales of goods transactions are subject to a statute of limitations period of:
A) one (1) year.
B) two (2) years.
C) three (3) years.
D) four (4) years.
Q2) Which of the following is not an element of an accord and satisfaction?
A) a bona fide dispute
B) a proposal to settle the dispute
C) performance of the agreement to settle the dispute
D) reservation of rights under the federal Consumer Credit Protection Act
Q3) The parties may agree that the adequacy of performance under a contract is to be determined by a third party.
A)True
B)False
Q4) In most bilateral contracts, the performances of the parties are __________.
A) conditions precedent
B) conditions subsequent
C) recurrent conditions
D) concurrent conditions
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Chapter 20: Breach of Contract and Remedies
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58 Verified Questions
58 Flashcards
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Sample Questions
Q1) A contract provision stating that one of the parties shall not be liable for damages in case of a breach is called a(n) __________ clause.
A) liquidated damages
B) exculpatory
C) waiver.
D) due process
Q2) An acceptance with a reservation of right must be in writing.
A)True
B)False
Q3) When a party expressly declares before the time for performance arrives that the contract will not be performed, such a declaration is called an anticipatory repudiation.
A)True
B)False
Q4) Contract provisions that limit the remedies of the parties are generally unenforceable.
A)True
B)False
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22
Chapter 21: Personal Property and Bailments
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Sample Questions
Q1) If while trespassing a hunter kills game, the game belongs to that hunter.
A)True
B)False
Q2) A bailee's lien gives the bailee the right to keep possession of the bailed property until reasonable charges for storage and/or repairs are paid.
A)True
B)False
Q3) Barry and Eldridge owned Blueacre as tenants in common. Eldridge died. Blueacre is owned:
A) solely by Barry because of the survivorship feature.
B) jointly by Barry and the state because of escheat.
C) by Barry and Eldridge's heirs.
D) solely by Eldridge's heirs.
Q4) A tenancy in common is a form of ownership by two or more persons.
A)True
B)False
Q5) The standard of care for bailments is reasonable care under the circumstances.
A)True
B)False
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Chapter 22: Legal Aspects of Supply Chain Management
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Sample Questions
Q1) The term special bailee is an historical term, but a special bailee has no greater duty than any other bailee.
A)True
B)False
Q2) When a carrier accepts goods for land shipment, it ordinarily issues to the shipper a(n):
A) bill of lading.
B) intent to transport memorandum.
C) warehouse receipt.
D) trust receipt.
Q3) A common carrier of goods has the right to:
A) make reasonable and necessary rules for the conduct of its business.
B) charge a rate that enables a fair return.
C) charge demurrage.
D) all of the above.
Q4) A sale by a factor can pass title to goods from the consignor to the purchaser. A)True B)False
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Chapter 23: Nature and Form of Sales
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Sample Questions
Q1) A merchant cannot revoke a firm offer to buy or sell goods if the merchant has:
A) promised to keep the offer open.
B) declared in the presence of two or more reputable witnesses that the offer will be kept open.
C) received consideration to keep the offer open.
D) stated in a signed letter that the offer would not be revoked for a specified period of time.
Q2) A contract involving both services and goods is classified as a contract for the sale of goods if:
A) the services are to be performed upon the goods.
B) the services cannot be performed unless the goods are supplied.
C) no charge is made for the services.
D) the sale of goods is the dominant aspect of the transaction.
Q3) If a contract for the sale of goods does not state the price to be paid, the:
A) contract is void because it is too indefinite to be enforced.
B) buyer is required to pay a reasonable price for the goods.
C) buyer can pay whatever price the buyer in good faith believes is a proper price.
D) seller can rightfully charge whatever price the seller in good faith believes is a proper price.
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Page 25
Chapter 24: Title and Risk of Loss
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Sample Questions
Q1) If a contract contains a delivery term of __________, the seller's responsibility is to get the goods to the buyer.
A) FOB place of shipment
B) FOB place of destination
C) CIF place of shipment
D) CIF place of destination
Q2) In a sale or return transaction, until the actual return of the goods is made, title and risk of loss remain with the buyer.
A)True
B)False
Q3) When negotiable documents of title to goods are sold, the risk of loss and the title to the goods pass to the buyer when the documents are delivered to the buyer.
A)True
B)False
Q4) COD is a shipping term that requires the buyer to pay in order to gain physical possession of the goods.
A)True
B)False
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Chapter 25: Product Liability: Warranties and Torts
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Sample Questions
Q1) Express warranties may be made before, during, but not after the sale of goods.
A)True
B)False
Q2) A warranty is limited if:
A) only the original buyer is covered by the warranty.
B) the buyer must pay any cost for repair or replacement of a defective product.
C) it covers only part of the product purchased.
D) all of the above.
Q3) If a lawn mower will not cut any type of grass, there is a breach of the warranty of merchantability, even if the warranty was conspicuously disclaimed.
A)True
B)False
Q4) The requirement of privity of contract to allow recovery in a sales contract has been widely rejected.
A)True B)False
Q5) The theories of product liability are mutually exclusive.
A)True
B)False
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Chapter 26: Obligations and Performance
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Sample Questions
Q1) The statement, "I doubt that I can perform the contract," is a repudiation of the contract.
A)True
B)False
Q2) The standard for commercial impracticability is:
A) hypothetical.
B) conjectural.
C) objective.
D) subjective.
Q3) When a method of transportation called for by a contract becomes unavailable for any reason, the contract is automatically voided.
A)True
B)False
Q4) When one party notifies another party that he/she will not perform the contract and such notification is given in advance of the contract deadline:
A) an anticipatory repudiation has occurred.
B) a repudiation has occurred.
C) both a and b
D) none of the above.
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Chapter 27: Remedies for Breach of Sales Contracts
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Sample Questions
Q1) Notifying a seller about a defect is not necessary if the buyer files suit for breach within four years.
A)True
B)False
Q2) A seller may cancel a sales contract if the buyer:
A) wrongfully rejects the goods.
B) repudiates the contract.
C) fails to make a payment due on or before delivery.
D) all of the above.
Q3) The UCC statute of limitations applies to actions brought for remedies on the breach of a sales contract.
A)True
B)False
Q4) Rejection of improper tender and revocation of acceptance are
A) synonymous.
B) distinguishable remedies.
C) common law remedies.
D) non-UCC remedies.
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Chapter 28: Kinds of Instruments, Parties, and Negotiability
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Sample Questions
Q1) Which of the following factors do not affect negotiability of an instrument?
A) a provision specifying the collateral that secures the debt
B) the antedating of the instrument
C) the omission of a date of execution
D) none of the above affect negotiability
Q2) The drawee on a check is a bank.
A)True
B)False
Q3) If a check is made payable to Paolo, and Paolo signs on the back of the check, Paolo is:
A) the payee and the indorser.
B) the drawee and the indorser.
C) the payee and the endorsee.
D) only the indorser.
Q4) The party who writes or creates a promissory note is called the:
A) payee.
B) drawee.
C) drawer.
D) maker.
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Chapter 29: Transfers of Negotiable Instruments and Warranties
of Parties
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Sample Questions
Q1) A blank indorsement turns a(n) __________instrument into a(n) __________ instrument.
A) negotiable; non-negotiable
B) non-negotiable; negotiable
C) bearer; order
D) order; bearer
Q2) Clark is the senior payroll clerk for the Gonzalez Corporation. In preparing the weekly payroll checks for the corporation, Clark added the name of Simmons to the payroll list. Clark knew that Simmons was not an employee of the corporation. Lewis, the treasurer of the corporation, signed the payroll checks and delivered them to Clark. Clark distributed all of the checks to the correct employees with the exception of the one made payable to the order of Simmons. Clark endorsed the name of Simmons to the check, cashed it with Diamond Check Cashing, and vanished. In this situation:
A) an endorsement was not necessary to negotiate the instrument.
B) the Gonzalez Corporation can seek recovery against Diamond Check Cashing.
C) the forged signature is given the same effect as though it had been authorized by the named payee.
D) Clark is not subject to civil or criminal liability.
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Chapter 30: Liability of the Parties Under Negotiable Instruments
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Q1) A limited defense will not defeat a holder in due course but will defeat an ordinary holder.
A)True
B)False
Q2) Manuel sued Patricia on a promissory note. Patricia admitted signing the note, but raised the defense that Manuel was not a holder in due course. Can Manuel recover without proving that he is a holder in due course?
Q3) A holder is a party in possession of an instrument that "runs" to him. An instrument runs to a party if it is:
A) payable to his or her order.
B) bearer paper.
C) indorsed to him or her.
D) all of the above.
Q4) A holder having the rights of a holder in due course is subject to the defense of fraud in the inducement.
A)True B)False
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Chapter 31: Checks and Funds Transfers
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Q1) Which of the following statements is correct concerning a stale check?
A) A check is stale when dated more than six (6) months before presentation to the bank, but the bank may in good faith pay the check.
B) A check is stale when dated more than one (1) year before presentation to the bank.
C) A check is stale when dated more than six (6) months before presentation to the bank, and the bank is legally prohibited from paying the check.
D) Certified checks are stale after three (3) months.
Q2) If a bank pays a check whose face has been altered to increase the amount above that which the drawer intended to pay, the bank:
A) is liable to the drawer for the amount of the increase.
B) has defenses against the drawer's claims.
C) incurs liability only if it failed to examine the check before payment.
D) incurs liability only if the drawer made the alteration.
Q3) The drawee of a check is always a bank.
A)True
B)False
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Chapter 32: Nature of the Debtor-Creditor Relationship
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Q1) Letters of credit are a form of advance arrangement for financing.
A)True
B)False
Q2) Suretyship and guaranty transactions have the common feature of a promise to answer for the debt or default of another.
A)True
B)False
Q3) A surety that has made payment of a claim for which it was liable as surety is entitled to indemnity from the principal debtor.
A)True
B)False
Q4) Suretyship, guaranty, and indemnity contracts all create a relationship by which one party becomes responsible for the debt or undertaking of another party.
A)True
B)False
Q5) The creditor first must proceed against the debtor before suing the surety.
A)True
B)False
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Page 34
Chapter 33: Consumer Protection
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Q1) The owner of a lost credit card is:
A) liable for all purchases made by its finder if the card was lost through negligence.
B) not liable for any purchases if the card was lost despite the exercise of reasonable care by the cardholder.
C) liable for all purchases if the card originally had been sent to the cardholder without any prior request and never was used by such holder.
D) not liable for more than $50 for the unauthorized use of the card.
Q2) Automobile lemon laws protect only persons buying automobiles for personal, family, or household use.
A)True
B)False
Q3) The types of provisions that make contracts unconscionable include clauses that award excessive damages or the application of credit payments across purchases over time so that the consumer is never able to pay off any goods.
A)True
B)False
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Chapter 34: Secured Transactions in Personal Property
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Q1) Self-help repossession of collateral upon a buyer's default is contrary to public policy and never is allowed.
A)True
B)False
Q2) The property that is subject to the security interest is called collateral.
A)True
B)False
Q3) Attachment provides creditors with rights.
A)True
B)False
Q4) In most states, __________ provides that a security interest in a non-inventory motor vehicle must be noted on the vehicle title registration.
A) a non-Code statute
B) UCC Article 2
C) UCC Article 9
D) judicial precedent
Q5) Under Revised UCC Article 9, a financing statement must be signed by the debtor. A)True
B)False
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Chapter 35: Bankruptcy
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Q1) Jurisdiction over bankruptcy proceedings is vested in the federal district courts.
A)True
B)False
Q2) The filing of a voluntary, but not an involuntary, petition operates as an automatic stay.
A)True
B)False
Q3) The debtor will be denied a discharge if:
A) the debtor had been extravagant.
B) the debtor incurred debts because of negligence.
C) the debtor received a discharge ten (10) years previously.
D) the debtor refused to obey a lawful order of the court.
Q4) Chapter 7 is:
A) a liquidation proceeding.
B) a reorganization proceeding.
C) an extended time payment plan.
D) always an involuntary proceeding.
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Chapter 36: Insurance
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Q1) When a provision of an endorsement conflicts with a provision of a policy, the endorsement controls.
A)True
B)False
Q2) An insurer who wrongfully refuses to defend the insured is liable for:
A) breach of contract.
B) insurance fraud.
C) the tort of wrongful interference with contractual relations.
D) the tort of malicious prosecution.
Q3) An insurable interest in property must exist at the time that the loss is suffered, while an insurable interest in life must exist at the time that the policy is issued.
A)True
B)False
Q4) The coverage of the Personal Auto Policy (PAP) is limited to claims arising from the "use and operation" of an automobile.
A)True
B)False
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Chapter 37: Agency
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Q1) An agent is under a duty to obey:
A) all instruction given by the third party.
B) all lawful instructions given by the principal.
C) all instructions given by the principal.
D) none of the above, since "obedience" is not an obligation of the agent.
Q2) What is not a true statement concerning apparent authority?
A) It is true authority to act for a principal.
B) It is based on appearances created by the principal.
C) It is essential that the third person reasonably believe that the agent has authority.
D) Merely giving possession to another party does not create apparent authority to sell.
Q3) Initially, ratification is a question of:
A) intention.
B) consideration.
C) form.
D) implication.
Q4) The scope of an agent's authority is always known by the third party.
A)True
B)False
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Chapter 38: Third Persons in Agency
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Q1) Agent's may intentionally make themselves liable on contracts with third persons.
A)True
B)False
Q2) An employer is clearly liable for any intentional, unprovoked assault committed by an employee on a third person.
A)True
B)False
Q3) Hiring an individual with a criminal record is conclusive proof that the employer is liable for the tort of negligent hiring.
A)True
B)False
Q4) In which of the following scenarios is the agent exposed to the greatest risk of liability?
A) disclosed principal and authorized contract
B) undisclosed principal and authorized contract
C) partially disclosed principal and authorized contract
D) authorized receipt of money from third person remitted to disclosed principal
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Chapter 39: Regulation of Employment
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Q1) An employment contract of indefinite duration is:
A) terminable at will.
B) invalid.
C) automatically terminated after five years.
D) terminable only for good cause.
Q2) The right of employees to collectively bargain is guaranteed by the National Labor Relations Act (NLRA).
A)True
B)False
Q3) The duties of an employee are determined primarily by the contract of employment with the employer.
A)True
B)False
Q4) The federal-state system that provides unemployment compensation under the Social Security Act of 1935 excludes all of the following categories of employees except:
A) agricultural employees.
B) domestic employees.
C) state and local government employees.
D) all of the above are excluded from coverage.
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Chapter 40: Equal Employment Opportunity Law
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Q1) Title VII requires that employers make reasonable efforts to accommodate their employees' religious practices.
A)True
B)False
Q2) The first action generally attempted by the EEOC is:
A) litigation.
B) conciliation.
C) mediation.
D) arbitration.
Q3) A seniority system is unlawful if:
A) workers with longer years of service are laid off last.
B) a union did not agree to the policy.
C) it results from an intention to discriminate.
D) workers with longer years of service are predominantly from one race.
Q4) When supervisors seek sexual favors in return for job benefits, the practice is called:
A) quid pro quo sexual harassment.
B) hostile work environment sexual harassment.
C) res ipsa loquitur sexual harassment.
D) none of the above.
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Chapter 41: Types of Business Organizations
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Q1) Franchise agreements frequently contain an arbitration provision under which a neutral party is to make a final and binding determination whether there has been a breach of the contract sufficient to justify cancellation of the franchise.
A)True
B)False
Q2) Franchising is basically contractual in nature.
A)True
B)False
Q3) A franchisor is the person to whom the franchise is granted.
A)True
B)False
Q4) The relationship between the franchisor and the franchisee is ordinarily an arm's-length employment relationship.
A)True
B)False
Q5) A joint venture typically relates to the carrying out of a single enterprise or transaction.
A)True
B)False
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Chapter 42: Partnerships
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Q1) Which of the following will not result in dissolution of the partnership by court decree?
A) a partner becomes incapable of performing the terms of the partnership agreement
B) a partner persistently or willfully acts in such a way that it is not reasonably practicable to carry on the partnership business
C) the expulsion of a partner
D) all of the above
Q2) A partner may withdraw from the partnership without liability:
A) unless the withdrawal violates the partnership agreement.
B) when the partnership is not for a definite purpose.
C) when the partnership is not for a definite time.
D) all of the above.
Q3) Partnership property may consist of:
A) real property only.
B) personal property only.
C) any and all property acquired by the partnership.
D) all property contributed by the partners or acquired for the firm or with its funds.
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44
Chapter 43: LPs, LLCs, and LLPs
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Q1) In a limited partnership, general partners are not responsible for the debts of the firm. A)True
B)False
Q2) The spread of limited liability corporation statutes resulted from:
A) a United States Supreme Court decision.
B) an Internal Revenue Service ruling.
C) a Wyoming Supreme Court decision.
D) a Securities and Exchange Commission ruling.
Q3) Under the Revised Uniform Limited Partnership Act, a limited partner probably will not lose the protection of limited liability when the limited partner:
A) becomes a contractor for, or an agent or employee of, the limited partnership or of a general partner.
B) consults with and advises a general partner regarding the partnership business.
C) votes on partnership matters, such as dissolving and winding up the limited partnership or removing a general partner.
D) all of the above.
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Chapter 44: Corporate Formation
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Q1) In states that have adopted the Revised Model Business Corporation Act, the secretary of state may commence proceedings to administratively dissolve a corporation under all but which of the following circumstances?
A) the corporation adopts more than one business purpose.
B) the corporation does not pay franchise taxes within sixty (60) days after they are due
C) the corporation does not file its annual report within sixty (60) days after it is due.
D) the corporation is without a registered agent or registered office for sixty (60) days or more.
Q2) If there is a consolidation of corporations A, B, and C:
A) corporations B and C are absorbed into corporation A, and corporation A continues to exist.
B) all of the corporations continue to exist.
C) all corporations continue to exist, but corporation A owns all of the stock of corporations B and c.
D) corporations A, B, and C cease to exist, and a new corporation with the property and assets of the old corporations comes into being.
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Chapter 45: Shareholder Rights in Corporations
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Q1) Voting trusts are usually illegal.
A)True
B)False
Q2) A shareholder does not:
A) qualify as a member of the corporation.
B) own any specific property of the corporation.
C) have a fractional interest in the total property of the corporation.
D) all of the above.
Q3) Ordinarily, each shareholder is entitled to one vote for each voting share.
A)True
B)False
Q4) Shares of stock that have been issued to stockholders in a corporation are said to be outstanding.
A)True
B)False
Q5) A bona fide purchaser of stock is shielded from the claim that the transfer was made in violation of a transfer restriction that was unknown to the purchaser and that was not noted conspicuously on the certificate.
A)True
B)False
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Chapter 46: Securities Regulation
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Q1) An investment contract exists if which of the following elements are present?
A) an investment of money
B) a common enterprise
C) an expectation of future profits
D) all of the above
Q2) The Market Reform Act of 1990 empowers the SEC to suspend all trading when markets are excessively volatile.
A)True
B)False
Q3) The SEC requires that annual shareholder reports be submitted to shareholders in any proxy solicitation on behalf of management.
A)True
B)False
Q4) The Securities Act of 1933 prohibits the offering or sale of securities to the public in interstate commerce before a registration statement has been filed with the Securities and Exchange Commission (SEC).
A)True
B)False
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Page 48
Chapter 47: Accountants Liability and Malpractice
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Q1) The standard of care for accountants' liability for malpractice:
A) is the same in all cases.
B) does not vary from community to community.
C) requires accountants to exercise the degree of skill and care commonly exercised by others following the same calling within the same community.
D) requires accountants to exercise the degree of skill and care commonly exercised by the best accountants within the same community
Q2) To ensure that audit partners do not become entrenched, Sarbanes-Oxley requires audit firms to change audit partners at least once every __________ years.
A) three (3)
B) five (5)
C) seven (7)
D) ten (10)
Q3) The contact rule applies in which of the following states?
A) Alabama
B) Indiana
C) New York
D) All of the above
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Chapter 48: Management of Corporations
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Q1) The sale of corporate assets outside the regular course of a corporation's business would require a vote of the shareholders.
A)True
B)False
Q2) The officers of a corporation are liable for errors of judgment that cause a loss to the stockholders.
A)True
B)False
Q3) The RMBCA provides that, absent a conflicting provision in the articles of incorporation, directors may be removed:
A) with or without cause by a majority vote of the shareholders.
B) with cause by a majority vote of the shareholders, and without cause by a unanimous vote.
C) with or without cause by a unanimous vote of the shareholders.
D) only with cause.
Q4) Action at a shareholders' meeting can be taken only while a quorum is present.
A)True
B)False
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Page 50
Chapter 49: Real Property
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Q1) To which of the following parties does the landowner owe a duty to take reasonable steps to discover any danger and a corresponding duty to warn the party of or correct the discovered danger?
A) trespasser
B) licensee
C) invitee
D) all of the above
Q2) Tucker and Hankey were adjoining property owners. Tucker claimed that the fence separating their properties was not located properly and that it should be moved back onto Hankey's land. Hankey claimed that he owned the strip between the fence and the alleged boundary line by adverse possession. He proved that for forty (40) years there had been on the strip in question a barn with a cement floor, which had been built by the person from whom he purchased his land, and that he had been told by the former owner that the fence was the boundary line. The fence consisted of five-foot-high barbed wire set in cement. Did Hankey own the strip by adverse possession?
Q3) A condominium is a combination of co-ownership and individual ownership.
A)True
B)False
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Chapter 50: Environmental Law and Land Use Controls
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Q1) Under the Clean Water Act, the EPA has developed effluent guidelines, which are ranges for discharges organized according to industrial groups and for specific plants in each of these groups.
A)True
B)False
Q2) Private citizens have the right to sue for injunctions against companies that are in violation of federal environmental quality statutes.
A)True
B)False
Q3) Funds from the Superfund are used to pay the cost of eliminating or containing condemned waste sites.
A)True
B)False
Q4) If any uncertainty exists in the interpretation of a restrictive covenant, the covenant will be construed strictly in favor of the free use of the land.
A)True
B)False
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Chapter 51: Leases
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Q1) Rent is automatically increased:
A) if the lessor makes expensive improvements to the property.
B) when the cost of living increases.
C) if the lease contains an escalation clause and the facts demonstrate that application of such a clause is appropriate
D) if the lessor's taxes on the rented property are increased.
Q2) A tenant in possession has control of the property and is therefore liable when the tenant's failure to use due care under the circumstances causes harm to licensees or invitees.
A)True
B)False
Q3) If a leased building is destroyed, the lease is not terminated, and the landlord has a duty to restore the building to its former condition.
A)True
B)False
Q4) Under the common law, the reason a landlord terminates a lease by notice is immaterial.
A)True
B)False
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Chapter 52: Decedents Estates and Trusts
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Q1) Where a testatrix executes a will and later has a child:
A) the child is prohibited by law from receiving anything from the estate.
B) many states hold that the will of the testatrix is partially revoked by operation of law to provide a share to the after-born child.
C) a new will must be executed because the birth voids the original will.
D) the after-born child takes a share by escheat.
Q2) Margo had only one son, and her husband had predeceased her. The son was reckless and extravagant, but Margo loved him dearly. She left all her property to a trustee in trust for her son and provided that the trust was a spendthrift trust. Margo further provided that the income from the trust was to be paid to her son quarterly until he reached the age of 30 at which time the full trust corpus was to be paid over to him. After Margo's death and before the son had reached the age of 30, the son signed a contract that purported to transfer the entire trust corpus to a finance company. The son was paid for this. The son had also run up many unpaid bills on which he was sued and judgments entered against him. The finance company and the other judgment creditors are seeking to compel the trustee to turn over the trust corpus to them. Decide.
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Page 54