Business and Society Exam Review
Course Introduction
Business and Society explores the dynamic relationship between businesses and the broader social environment in which they operate. The course examines the responsibilities of organizations toward diverse stakeholders, including employees, customers, communities, and the environment. Key topics include corporate social responsibility, ethical decision-making, stakeholder theory, sustainability, and the influence of public policy and regulations. Through case studies and contemporary examples, students gain insight into how companies balance profitability with social and ethical considerations, preparing them to make informed decisions as future business leaders and contributors to society.
Recommended Textbook
Andersons Business Law and the Legal Environment Comprehensive 23rd Edition by Twomey
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51 Chapters
2716 Verified Questions
2716 Flashcards
Source URL: https://quizplus.com/study-set/1071
Page 2
Chapter 1: The Nature and Sources of Law
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60 Verified Questions
60 Flashcards
Source URL: https://quizplus.com/quiz/21143
Sample Questions
Q1) One of our most important rights is the right of privacy.
A)True
B)False
Answer: True
Q2) If a court issues an injunction, the court would be ordering a(n) ________.
A) equitable remedy
B) legal remedy.
C) private remedy.
D) order of equitable damages.
Answer: A
Q3) Jacob just won the state lottery. Discuss his right to privacy.
Answer: Within the context of the Fourth Amendment, Jacob continues to be protected to the same extent he was prior to winning. Regarding his right to be protected from intrusions by others, however, he most likely will have to give up some privacy rights because of his good fortune; that is, although he remains a private citizen, he will not have quite the same degree of privacy protection in this arena as he had before winning the lottery.
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3
Chapter 2: The Court System and Dispute Resolution
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57 Verified Questions
57 Flashcards
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Sample Questions
Q1) A family law court is an example of a small claims court.
A)True
B)False
Answer: False
Q2) A peremptory challenge to a prospective juror generally can be exercised without giving a reason.
A)True
B)False
Answer: True
Q3) A deposition is or can accomplish any of the following except:
A) the testimony of a witness taken under oath.
B) conducted outside of the courtroom.
C) can be used to impeach a witness.
D) can be used to dismiss the lawsuit.
Answer: D
Q4) When arbitration is mandatory under a statute, the losing party generally can appeal from such arbitration to a court.
A)True
B)False
Answer: True
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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) The U.S. Patriot Act and airport security regulations were enacted for the protection of:
A) the person.
B) public, health, safety and morals.
C) the state.
D) personal rights.
Answer: C
Q2) Despite the importance of ethical behavior for business success, few Fortune 500 companies have codes of ethics to resolve ethical dilemmas.
A)True
B)False
Answer: False
Q3) Moral relativists solve ethical dilemmas according to time and place. A)True
B)False
Answer: True
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Chapter 4: The Constitution As the Foundation of the Legal Environment
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60 Verified Questions
60 Flashcards
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Sample Questions
Q1) Which of the following is true about administrative agencies?
A) Administrative agencies exercise powers guaranteed to them in the U.S. Constitution.
B) Administrative agencies exercise powers allocated to them by the president.
C) Administrative agencies make decisions that are rarely reviewed by the courts.
D) Administrative agencies make decisions that are effectively reviewed by voters.
Q2) A business' right to commercial speech - or advertising - has the same protections as a natural person.
A)True
B)False
Q3) Congressional 'silence' in particular subject area could mean Congress doesn't want to regulate in that particular subject area.
A)True
B)False
Q4) The United States utilizes a bicameral division of government.
A)True
B)False
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Page 6
Chapter 5: Government Regulation of Competition and Prices
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48 Verified Questions
48 Flashcards
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Sample Questions
Q1) Governments may regulate prices but not credit terms.
A)True
B)False
Q2) The Federal Trade Commission administers the law prohibiting unfair methods of competition.
A)True
B)False
Q3) A violator of the Sherman Act may be subject to:
A) fine only.
B) imprisonment only.
C) both fine and imprisonment.
D) neither fine nor imprisonment.
Q4) Under the Clayton Act, when large-scale enterprises plan to merge, they must in advance:
A) notify the New York Stock Exchange.
B) notify the President of the United States.
C) complete the necessary financing arrangements.
D) notify the Antitrust Division of the Department of Justice.
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Chapter 6: Administrative Agencies
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58 Verified Questions
58 Flashcards
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Sample Questions
Q1) An administrative agency has the power to investigate, to require persons to appear as witnesses, to require witnesses to produce relevant papers and records, and to bring proceedings against those who violate the law.
A)True
B)False
Q2) An administrative agency can be created to perform:
A) only one of the three functions of government (executive, legislative, or judicial).
B) any two of the three functions of government.
C) all three of the functions of government.
D) none of the three functions of government.
Q3) In an emergency, an administrative agency can act beyond the scope of the statute that created it.
A)True
B)False
Q4) The Administrative Procedure Act is a federal law that establishes the operating rules for administrative agencies.
A)True
B)False
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Chapter 7: Crimes
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60 Verified Questions
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Sample Questions
Q1) Penalties for crimes are:
A) always paid to the government.
B) always paid to the victim(s).
C) shared equally between the government and the victim(s).
D) subject to forfeiture.
Q2) The issuing or delivery of a forged instrument to another person constitutes the crime of counterfeiting a forged instrument.
A)True
B)False
Q3) When a defendant is convicted of a crime, the court may also declare that the defendant's rights in any property used or gained from the crime be confiscated. This is known as __________.
A) forfeiture
B) reversion
C) subversion
D) divestiture
Q4) Embezzlement involves fraud.
A)True
B)False
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Chapter 8: 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) In a state that has the comparative negligence doctrine with a "50 percent" rule, a jury finds that Bill is 35% liable for his own injuries in a negligence suit he brought against Tina. In this situation, Bill will recover:
A) 65% of the damages he seeks from Tina
B) 50% of the damages he seeks from Tina
C) Nothing at all from Tina
D) 100% of the damages he seeks from Tina
Q3) The assumption of risk defense has been abolished in several states.
A)True
B)False
Q4) Governments are generally immune from tort liability.
A)True
B)False
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Chapter 9: Intellectual Property Rights and the Internet
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53 Verified Questions
53 Flashcards
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Sample Questions
Q1) A copyright is the exclusive right given by federal statutes to the creator of a literary or an artistic work to use, reproduce, and display the work.
A)True
B)False
Q2) Trademarks may be used to protect the exclusive right to identify either products or services.
A)True
B)False
Q3) 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
Q4) To be patentable, an invention must be new and not obvious to a person of ordinary knowledge and skill in the art or technology to which the invention is related.
A)True
B)False
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11
Chapter 10: The Legal Environment of International Trade
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57 Verified Questions
57 Flashcards
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Sample Questions
Q1) TRIPS extends the Paris Convention to special protection for "well-known marks".
A)True
B)False
Q2) Under which of the following doctrines is it held that a foreign sovereign cannot be sued unless it engages in illegal commercial conduct?
A) act-of-state
B) sovereign compliance
C) Timberlane
D) sovereign immunity
Q3) Which of the following does not describe the European Union (EU)?
A) It was formerly known as the European Economic Community.
B) It had ten members sign on in 2004.
C) It eliminated internal barriers to the free movement of goods, persons, services, and capital between member countries.
D) It is administered solely by the heads of state of the member countries.
Q4) A common barrier to the free movement of goods across borders is the tariff barrier.
A)True
B)False
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Chapter 11: 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) An executory contract is:
A) void if neither party has performed.
B) One that has been completely performed.
C) entered into but not fully performed.
D) always unilateral in nature.
Q2) Quasi-contractual liability will generally be imposed when the cost of performing a contract is greater than had been expected.
A)True
B)False
Q3) When a contract sets a price for services rendered, a plaintiff cannot sue for reasonable value.
A)True
B)False
Q4) A contract of record is also referred to as a(n):
A) recognizance.
B) reconnaissance.
C) recording contract.
D) implied contract.
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Chapter 12: Formation of Contracts: Offer and Acceptance
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53 Verified Questions
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Sample Questions
Q1) Generally, advertisements, catalog prices, and circulars are offers that can be accepted.
A)True
B)False
Q2) In general, an acceptance occurs when:
A) a particular form of words is stated to the offeror.
B) a particular mode of expression is made to the offeror.
C) the offeree reserves the right to reject the offer.
D) a clear expression of the offeree's agreement to be bound by the terms of the offer occurs.
Q3) If an offer is indefinite or vague or if an essential provision is lacking, no contract arises from an attempt to accept it.
A)True
B)False
Q4) The first statement made by one of two persons can be anyone of the following except:
A) acceptance.
B) preliminary discussion.
C) invitation to negotiate.
D) a survey.
Page 14
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Chapter 13: Capacity and Genuine Assent
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44 Verified Questions
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Sample Questions
Q1) Ordinarily, a party to a contract has no duty to volunteer information to the other party.
A)True
B)False
Q2) In order for fraud liability to arise, the listener must actually rely on the false statement of fact.
A)True
B)False
Q3) An apparently voluntary agreement may in fact not be voluntary if:
A) undue influence is present.
B) physical duress is present.
C) economic duress is present.
D) all of these.
Q4) A minor cannot avoid a contract to purchase a car if the:
A) car has been destroyed.
B) car has been damaged.
C) car is used for non-commercial purposes.
D) minor is able to return the car but does not do so.
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Page 15
Chapter 14: Consideration
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Sample
Questions
Q1) A(n) _______ is a promise that depends on the occurrence of a specified condition in order for the promise to be binding.
A) cancellation provision.
B) preexisting legal obligation.
C) conditional promise.
D) good-faith adjustment.
Q2) An agreement to pay reasonable additional compensation to a contractor for the performance of a pre-existing contract when the contractor faces extraordinary circumstances caused by unforeseen difficulties is called a:
A) good-faith adjustment.
B) bribe.
C) compensatory allowance.
D) relief payment.
Q3) None of the following can be legal consideration except:
A) Refraining from beating one's spouse.
B) Promising to refrain from beating one's spouse.
C) Refraining from smoking cigarettes.
D) Refraining from using cocaine.
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16
Chapter 15: Legality and Public Policy
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Sample Questions
Q1) An agreement that calls for the commission of a civil wrong is illegal and void.
A)True
B)False
Q2) A(n) _______ contract is a take-it-or-leave-it contract that is unenforceable because it is deemed to be too harsh or oppressive to one of the contracting parties.
A) unilateral influence
B) bilateral influence
C) adhesion
D) non-compete
Q3) An agreement that unreasonably restrains trade is illegal and void on the ground that it is contrary to public policy.
A)True
B)False
Q4) The failure to have a license will not render agreements void if the license: A) is based on formal education
B) is required for engaging in a particular business or trade
C) is a regulatory license
D) is readily obtainable by anyone who offers payment of a required fee
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Chapter 16: Writing, Electronic Forms, and Interpretation of Contracts
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60 Verified Questions
60 Flashcards
Source URL: https://quizplus.com/quiz/21158
Sample Questions
Q1) The writing required by the statute of frauds in the case of a contract for the sale of land must:
A) be addressed to the other party to the contract.
B) be made with the intent to create a writing to satisfy the statute of frauds.
C) be signed at the end of the writing.
D) describe the land to be sold.
Q2) The parol evidence rule may not apply if:
A) the contract is materially incomplete.
B) the parties disagree on the meaning of the contract.
C) there is no ambiguity regarding the terms of the contract.
D) one party is unable to perform the contractual obligations.
Q3) An oral understanding is not binding if:
A) the services performed were not to the satisfaction of the other party.
B) the amount agreed to be paid for services rendered was not a fair and reasonable amount.
C) the parties intended to formalize their understanding with a written agreement.
D) the understanding may be terminated at will by either party.
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Page 18
Chapter 17: Third Persons and Contracts
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50 Verified Questions
50 Flashcards
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Sample Questions
Q1) 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.
Q2) When a buyer assigns the right to goods under a contract, the buyer's liability to make payment to the seller is:
A) transferred to the third party.
B) terminated.
C) still in effect.
D) shared equally with the third party.
Q3) A third-party beneficiary contract may be amended:
A) without the consent of the beneficiary.
B) by operation of law.
C) regardless of whether the contract allows modifications without the beneficiary's consent.
D) automatically when either party dies.
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Chapter 18: Discharge of Contracts
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Sample Questions
Q1) When parties contract expressly for a particular subject matter, the contract is discharged if the subject matter is destroyed through no fault of either party.
A)True
B)False
Q2) By operation of law, a party can be discharged in bankruptcy from debts.
A)True
B)False
Q3) The doctrine of substantial performance is concerned with the issue of whether an imperfect performance will be considered adequate to discharge one's responsibilities under a contract.
A)True
B)False
Q4) 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
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Chapter 19: Breach of Contract and Remedies
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58 Verified Questions
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Sample Questions
Q1) 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
Q2) A landlord who continuously accepts late rental payments without collecting the late fee provided in the lease:
A) waives the late fee.
B) will collect the late fee at a later date.
C) is ignorant of the late fee.
D) allows the tenant to repudiate the lease.
Q3) When one party commits a non-material breach of contract, the other party may rescind the contract.
A)True
B)False
Q4) Repeated breaches and waivers are generally interpreted to indicate:
A) poor business practices.
B) illegal behavior.
C) ignorance of the law.
D) modification of contract.
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Chapter 20: Personal Property and Bailments
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Sample Questions
Q1) Wrongful dominion over a principal's tangible personal property is a form of conversion.
A)True
B)False
Q2) A bailee's __________ gives the bailee the right to maintain possession of the bailed property until reasonable storage and/or repair charges are paid.
A) reversionary interest
B) lien
C) remainder interest
D) mortgage
Q3) Bailments may be:
A) created orally or through a writing.
B) created for either real or personal property.
C) created for nonpossessory personal property.
D) made only after delivery to the bailor is accomplished.
Q4) If while trespassing a hunter kills game, the game belongs to that hunter.
A)True
B)False
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Chapter 21: Legal Aspects of Supply Chain Management
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Sample Questions
Q1) The rights of a holder of a duly negotiated warehouse receipt are extinguished by the warehouser's surrender of goods to the depositor.
A)True
B)False
Q2) A transferee's rights to a warehouse receipt may be defeated by a good-faith purchaser of the goods from the transferor of the receipt.
A)True
B)False
Q3) A common carrier is absolutely liable for loss or damage to goods in all of the following situations except:
A) incidents arising from the inherent nature of the goods.
B) incidents involving a public enemy.
C) incidents involving acts of God
D) incidents involving mechanical breakdown of the vehicle.
Q4) The rights and duties of warehousers are regulated by the UCC.
A)True
B)False
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Chapter 22: Nature and Form of Sales
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Sample Questions
Q1) Suppose a merchant is about to transfer his entire inventory as part of an annual clearance action. This transfer is called a bulk transfer.
A)True
B)False
Q2) The UCC has adopted the common law 'mirror image' rule.
A)True
B)False
Q3) Janet Durham orally agreed to purchase certain computer hardware priced at $10,000 from Ted Stallings. The sale of the hardware also included a one-time setup service visit priced at $100. The total contract price amounted to $10,100. The computer hardware was delivered and set up, and Durham paid $10,100. Afterwards, Durham discovered that she could obtain the same goods and services from another seller for a total contract price of $9,100. She now seeks rescission of the contract, based on the fact that more than $500 in goods were involved in the sales transaction, that the contract between her and Stallings was subject to the statute of frauds as a result, and that the oral agreement between them was therefore unenforceable. Durham wants to return the computer hardware to Stallings, and receive reimbursement of $10,000 (She is willing to waive her claim to reimbursement for the $100 setup service visit.) Evaluate Durham's legal position in this matter.
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Page 24
Chapter 23: Title and Risk of Loss
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Sample Questions
Q1) COD is a shipping term that requires the buyer to pay in order to gain physical possession of the goods.
A)True
B)False
Q2) The expense and the risk of return in a sale or return situation is on the:
A) seller.
B) buyer.
C) lienholder.
D) secured creditor.
Q3) In an FOB shipment contract, title to the goods pass to the buyer when goods are delivered to the carrier.
A)True
B)False
Q4) When particular goods have been selected by either the buyer or the seller, or both, as being the goods called for by the sales contract, the goods are said to be A) identified.
B) actualized.
C) realized.
D) materialized.
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Chapter 24: Product Liability: Warranties and Torts
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Sample Questions
Q1) If there is a written contract, a disclaimer of the implied warranty of merchantability must be conspicuous.
A)True
B)False
Q2) Sal was at home going through his normal workout when he bent his barbell bar. Sal is a professional bodybuilder, and this fact is obvious from his appearance. Sal went to his local sporting-goods store and was approached by a clerk wishing to assist him. Sal told the clerk about his problem and the clerk asked Sal to wait while an appropriate bar was located. The clerk presented Sal with a bar that the clerk said "is just what you need for your type of weight requirements." Sal paid for the bar and was returning home when he stopped at a health food restaurant. The drink that he ordered had an unusual taste, but the food establishment refused a refund. Sal became ill from the drink, which, as it turned out, had a toxic substance in it. Sal had to be hospitalized. When Sal was able to work out again, he attached the weights to the new bar and lifted the bar under his chin. The bar snapped in the middle and severely cut Sal. Sal is angry about the drink and the barbell. What are the applicable warranties involved? Does Sal have a cause of action?
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Chapter 25: Obligations and Performance
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Sample Questions
Q1) If a contractually-specified mode of transportation is not available, the:
A) contract is automatically voided.
B) seller must make delivery by a commercially-reasonable substitute.
C) buyer must arrange to pick up the goods.
D) seller must make personal delivery.
Q2) A buyer always has a right to examine the goods to determine if, in fact, the goods conform to the contract.
A)True
B)False
Q3) A non-repudiating party has the right to require a guarantee of performance or a pledge of security.
A)True
B)False
Q4) A buyer has the right to accept some commercial units of a shipment and reject other commercial units.
A)True
B)False
Q5) Substantial impairment requires proof that goods are worthless.
A)True
B)False
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Chapter 26: Remedies for Breach of Sales Contracts
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Sample Questions
Q1) Suppose NovaTek sells $10,000 worth of goods to BestGear on credit and ships the products. During shipment NovaTek discovers BestGear is insolvent. NovaTek can stop shipment of the product if BestGear has not provided assurances.
A)True
B)False
Q2) A buyer can revoke acceptance of the goods, if the seller does any of the following, except:
A) the seller fails to deliver conforming goods.
B) the seller has repudiated the contract.
C) the defective goods substantially impair value of the contract.
D) cancels the shipment while in transit.
Q3) To recover damages, a buyer must give the seller notice of the breach within three (3) days.
A)True
B)False
Q4) A buyer may revoke acceptance because of a seller's failure to complete promised repairs.
A)True
B)False
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Chapter 27: Kinds of Negotiable Instruments and Negotiability
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Sample Questions
Q1) A check is an order by a bank itself to pay a sum of money to the order of another party.
A)True
B)False
Q2) An acceptor is a drawer who has accepted the liability of paying the amount of money specified in a draft.
A)True
B)False
Q3) If an instrument is negotiable, it is governed by Article 4 of the UCC.
A)True
B)False
Q4) The maker is the person who writes out and creates a promissory note.
A)True B)False
Q5) If an order or promise is not for money, the instrument is not negotiable. A)True
B)False
B)False Page 29
Q6) Antedating an instrument affects an instrument's negotiability. A)True
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Page 30
Chapter 28: Transfers of Negotiable Instruments and
Warranties of Parties
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Sample Questions
Q1) An indorsement "for deposit only" is:
A) restrictive.
B) qualified.
C) special.
D) blank.
Q2) Bearer paper may only be negotiated by the actual transfer of possession of the instrument.
A)True
B)False
Q3) A payee whose name is misspelled may indorse with the wrong name, the correct name, or both.
A)True
B)False
Q4) A forged or unauthorized indorsement is by definition:
A) an indorsement of the person by whom it appears to have been made.
B) no indorsement of the person by whom it appears to have been made.
C) binding on the party who refuses to ratify the instrument.
D) incapable of being ratified.
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Chapter 29: Liability of the Parties Under Negotiable Instruments
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Sample Questions
Q1) A taker of a negotiable instrument may be denied the status and protection of a holder in due course if:
A) one party is a consumer.
B) the close-connection doctrine applies.
C) the instrument is bearer paper.
D) the presentment is not made in a commercially reasonable manner.
Q2) 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
Q3) When the primary party refuses to pay an instrument according to its terms, said party is required to give:
A) notice of nonpayment.
B) notice of dishonor.
C) notice of denial.
D) secondary party notice.
Q4) Parties with rights in a negotiable instrument can be assignees or holders.
A)True
B)False
32
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Chapter 30: Checks and Funds Transfers
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Q1) A bank is not required to pay a check presented more than three months after its date.
A)True
B)False
Q2) Morris issued a check to Al in payment of a debt. There were sufficient funds in Morris' account to cover the check when it was presented for payment. However, due to an error, the bank dishonored the check. Which of the following parties is/are potentially liable to the holder?
A) the drawee bank only
B) Morris and the drawee bank
C) Morris only
D) the drawee bank and any collecting bank
Q3) A drawer may be held criminally liable if a check or draft is dishonored. A)True
B)False
Q4) To be effective, checks must be executed on forms that are printed expressly for that purpose and issued by a bank or other financial institution.
A)True
B)False
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Chapter 31: Nature of the Debtor Creditor Relationship
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Q1) Standby letters of credit are used only in international trade situations.
A)True
B)False
Q2) 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
Q3) A(n) __________ is an undertaking by one person, for consideration, to pay another person a sum of money in the event of a specified loss.
A) absolute guaranty
B) indemnity contract
C) guaranty of payment
D) suretyship
Q4) When a surety pays a claim that it is obligated to pay, the surety is exonerated, and automatically acquires the claim and the rights of the creditor.
A)True
B)False
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Chapter 32: Consumer Protection
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Q1) Those who are liable for violations of consumer protection situations are persons or enterprises that regularly enter into the type of transaction in which the injured consumer was involved.
A)True
B)False
Q2) The Fair Credit Reporting Act applies only to consumer credit.
A)True
B)False
Q3) Corrective advertising required by the FTC also is called retroactive advertising.
A)True
B)False
Q4) A finance company may not reject an loan applicant on any of the grounds listed below, except:
A) the applicant is married.
B) the applicant is sixty-five or older.
C) the applicant is divorced.
D) the applicant is on a fixed income.
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Chapter 33: Secured Transactions in Personal Property
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Q1) What is the purpose of a financing statement?
A) to meet UCC accounting requirements under Article 9
B) to create a security interest
C) to amend a security agreement
D) to alert third persons that a creditor has a security interest in the collateral described
Q2) In a secured transaction, the person to whom the money is owed is secured party and the buyer is the debtor.
A)True
B)False
Q3) Grund, a professional night club musician, financed the purchase of a drum set to be used in his night club act. Under Article 9, the drum set will be classified as a consumer good.
A)True
B)False
Q4) A debtor may redeem collateral from the secured party at any time prior to sale or disposal by paying all legal costs and expenses incurred by the secured party.
A)True
B)False
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36
Chapter 34: Bankruptcy
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Q1) Which of the following is a correct legal conclusion regarding Chapter 11 reorganization bankruptcy?
A) Individuals, partnerships, and corporations in business may be reorganized.
B) A plan for reorganization may be filed only by a committee of creditors.
C) When a reorganization plan is confirmed by the court, the creditors can revert back to their original position if they are not satisfied with the plan.
D) Individuals within a particular class of creditors can be treated differently if they object to the reorganization plan.
Q2) Peter is employed as a shop electrician for ABC, Inc. Peter has a car being repaired and a home on which he is paying mortgage payments. Peter is contemplating filing for bankruptcy, but he is not sure which type of petition to file. Peter also wonders whether the auto repair costs and the mortgage payments are dischargeable. Which bankruptcy filing is most appropriate for Peter? Are Peter's debts dischargeable?
Q3) A court can dismiss a Chapter 7 petition and convert it to a Chapter 13 bankruptcy if the debtor does not satisfy the means test.
A)True
B)False
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Page 37
Chapter 35: Insurance
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Q1) Any false statement in an application binds only the insured.
A)True
B)False
Q2) If an insured person tells her current husband that she is going to name him as beneficiary of her life insurance in place of her former husband and dies a year later without having taken any further steps with respect to the change of the policy beneficiary, the insurance company must pay the proceeds of the policy to:
A) the former husband.
B) the current husband.
C) the children by the first marriage.
D) the children by the second marriage.
Q3) An insurance broker generally is an independent contractor who is not employed by any one insurance company.
A)True
B)False
Q4) An incontestability clause gives insurance companies a statutory period of time to pay the claims suffered by the insured.
A)True
B)False
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Chapter 36: Agency
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Q1) Barnes agrees with Morgan to enter into the management of a new subdivision of residential housing. Morgan appoints Barnes as his manager for the duration of the development program. During the course of the construction, Barnes decides to use funds specified for the subdivision for an office space project that Barnes alone has been interested in completing. Morgan is very angry on learning of Barnes' actions and terminates the agency. Barnes insists that the agency cannot be terminated in this manner. Is Barnes correct?
Q2) Ames, an agent for Baker Antiques, had the authority to purchase early 20th-century American furniture costing a maximum of $1,500 per piece. Ames bought a 19th-century French desk for $3,000 from Carter. Baker was furious when she saw the desk, and she fired Ames. Nevertheless, she put the desk on display in the shop with a $5,000 price tag. When the best offer she got for the desk was $2,500, Baker returned the desk to Carter. Baker told Carter that Ames had exceeded his authority in purchasing the desk, and she demanded that Carter refund the $3,000 that Ames had paid for the desk. Will Carter have to do so?
Q3) An agency may arise by appointment, conduct, ratification, or operation of law. A)True
B)False
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Chapter 37: Third Persons in Agency
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Q1) Subject to certain limitations, a third person, on learning of the existence of an undisclosed principal, may sue the principal.
A)True
B)False
Q2) Apparent authority has the same effect as:
A) undisclosed authority.
B) actual authority.
C) partially disclosed authority.
D) imputation authority
Q3) The fact that a tort or crime is committed by an employee imposes vicarious liability on an employer.
A)True
B)False
Q4) The liability of a buyer for the purchase price of goods is terminated by the fact that the buyer gave the buyer's agent the purchase price to remit to the seller.
A)True
B)False
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Chapter 38: Regulation of Employment
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Q1) A person cannot be both an employee and an agent for a party at the same time.
A)True
B)False
Q2) Unemployment compensation benefits will most likely be denied to all of the following groups of people except: ______.
A) an employee who steals company property and is fired.
B) full-time students.
C) an employee who quits a job without cause.
D) an employee who is injured on the job.
Q3) Under the FLSA, workers in all of the following groups may be legally paid less than minimum wage except for: ______.
A) Full time college students.
B) Individuals with impaired productive capacity due to mental disability
C) Domestic service workers.
D) Workers at firms engaged in interstate commerce.
Q4) Workers' compensation statutes provide the exclusive remedy for employees who are covered by such statutes and who suffer job-related injuries.
A)True
B)False
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Chapter 39: Equal Employment Opportunity Law
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Q1) In a hostile work environment case, the plaintiff must prove severe and pervasive conduct on the supervisor's part to meet the plaintiff's burden of proof.
A)True
B)False
Q2) An affirmative action policy can do all of the following except:
A) help ensure a diverse work force.
B) be an effective means to avoid litigation costs.
C) provide job preferences for minorities and women.
D) provide equal pay for employees.
Q3) A men's clothing store policy of hiring males to do measurements for suit alterations is not an example of a BFOQ.
A)True
B)False
Q4) To be lawful, affirmative action must be time-limited.
A)True
B)False
Q5) Title VII is the only law regulating equal employment opportunities.
A)True
B)False
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Chapter 40: Types of Business Organizations
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Q1) Freedom from liability to third persons dealing with the franchise holder is one of the main reasons that franchisors grant franchises.
A)True
B)False
Q2) A major disadvantage of the sole proprietorship is: ______.
A) no organizational fees.
B) the sole proprietor obtains all of the profits.
C) the sole proprietor is personally liable for the debts of the sole proprietorship.
D) the sole proprietor is free to make all business decisions concerning operation of the sole proprietorship.
Q3) An owner's death would have no effect on any of the business entities below, except: ______.
A) a partnership
B) a corporation
C) a sole proprietorship
D) joint venture
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Chapter 41: Partnerships
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Q1) After the dissolution of a partnership, partners retain the authority to perform any acts necessary to wind up the business.
A)True
B)False
Q2) All the following are characteristics of a general partnership except: ______.
A) general
B) silent
C) secret
D) nominal
Q3) Partners hold title to firm property by:
A) tenancy in partnership.
B) tenancy in common.
C) joint tenancy.
D) partnership in common.
Q4) A partner must contribute capital to be considered a 'full partner.'
A)True
B)False
Q5) A partner is an agent of the partnership and of the other partners.
A)True
B)False
Page 44
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Chapter 42: LPs, LLCs, and LLPs
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Q1) LLC promoters can 'shake hands' and form an LLC.
A)True
B)False
Q2) When no LP certificate is filed, what is the result?
A) Only limited partners are fully liable.
B) Only general partners are fully liable.
C) Limited partners retain their limited liability.
D) Both general and limited partners are fully liable.
Q3) The dissolution and winding up of a limited partnership is governed by the same principles applicable to a: __________.
A) "subchapter S" corporation.
B) limited liability company.
C) general partnership.
D) limited liability partnership.
Q4) Limited partners are personally liable for debts of the business. A)True
B)False
Q5) An LLC is a separate legal entity and may own property in its own name.
A)True
B)False
45
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Chapter 43: Corporate Formation
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Q1) Subchapter S corporations have the benefits of limited liability as in partnerships and are taxed as corporations.
A)True
B)False
Q2) A merger is subject to antitrust law, while a corporate consolidation is not.
A)True
B)False
Q3) When two corporations merge: ______.
A) their separate existences cease, and a new corporation is formed.
B) one of the corporations absorbs the other.
C) each corporation's stockholders keep their original shares of stock
D) a new charter is needed.
Q4) If the proper procedure for incorporation has been followed, the corporation has a legal right to exist and is called a(n): ______.
A) corporation by estoppel
B) de jure corporation.
C) de facto corporation.
D) ultra vires corporation.
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Chapter 44: Shareholder Rights in Corporations
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Q1) Restrictions on the transfer of stock are always valid.
A)True
B)False
Q2) An interest in a corporation is based on the ownership of one or more shares of stock of the corporation.
A)True
B)False
Q3) If Bob owns 100 shares of stock for which he paid $1,000 to the corporation, the _______ would be $10 per share.
A) par value
B) book value
C) market value
D) capital value
Q4) Statutes authorizing the formation of professional corporations usually require that share ownership be limited to: ________.
A) residents of the same state
B) attorneys with malpractice insurance
C) duly licensed professionals
D) professionals without a malpractice history
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Chapter 45: Securities Regulation
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Q1) The Sarbanes-Oxley Act of 2002 requires written certification of the 10-K and 10-Q reports by each company's CEO and CFO.
A)True
B)False
Q2) Unless exempted, exchanges, brokers, and dealers who deal in the securities traded in interstate commerce must register with the SEC.
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) Which of the following federal laws grants the SEC the power to suspend all trading when markets are excessively volatile?
A) The Trust Indenture Act of 1939
B) The Market Reform Act of 1990
C) The Investment Advisors Act of 1940
D) The Remedies Act of 1990
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Chapter 46: Accountants Liability and Malpractice
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Q1) The Public Company Oversight Board:
A) is a governmental body.
B) must have at least three board members that are CPAs.
C) enforces professional rules that ensure audit quality and auditor independence.
D) is an agency within the IRS.
Q2) Misrepresentation: ______.
A) is the same as fraud.
B) is a false statement of fact made with the intent to deceive.
C) is a false statement of fact made without any intent to deceive.
D) can be used as a limitation to excuse an accountant from liability.
Q3) The known user rule imposes liability on the accountant for malpractice when he can foresee the parties who will rely on his work in the financial statements.
A)True
B)False
Q4) In contrast to contributory negligence principles, comparative negligence principles are never applied to malpractice situations.
A)True
B)False
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Chapter 47: Management of Corporations
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Q1) A director is disqualified from taking part in corporate action with respect to a matter in which the director has a disclosed conflicting interest.
A)True
B)False
Q2) The __________ rule allows management immunity from liability for corporate acts where there is a reasonable indication that the acts were made in good faith and with due care.
A) sovereign immunity
B) business judgment
C) reasonable director
D) good faith
Q3) Directors are usually allowed to vote by proxy.
A)True
B)False
Q4) When a meeting opens with a quorum, the quorum is broken if shareholders leave and those remaining are not sufficient to constitute a quorum.
A)True
B)False
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Chapter 48: Real Property
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Q1) Under race statutes, the first party to record the deed holds title to land.
A)True
B)False
Q2) Ulysses bought Whiteacre from Gordon but never recorded the deed. Gordon stayed on the property as a tenant for three (3) years. Near the end of the three (3) years, Gordon learned that Ulysses had never recorded the deed. Gordon advertised Whiteacre for sale and Cheryl negotiated with Gordon thinking that Gordon was the owner. Finally, Cheryl checked the records at the recording office and, finding no reason to question Gordon's ownership of the property, purchased Whiteacre from Gordon. Cheryl recorded the deed and Gordon fled with the purchase money. Meanwhile, Ulysses had failed to pay the real estate taxes on Whiteacre for the three (3) years in question thinking it was the responsibility of Gordon, the tenant. Ultimately, Cheryl and Ulysses disputed over the ownership of the property. Decide the case between Cheryl and Ulysses. Also decide whether Ulysses is responsible for the three (3) years of real estate taxes assessed while Gordon occupied the property as a tenant.
Q3) Land extends downward to the earth's center and upward indefinitely.
A)True
B)False
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Chapter 49: Environmental Law and Land Use Controls
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Q1) A nuisance: ________.
A) is created by every interference that has an effect on others.
B) is established when the plaintiff shows harm as the result of the defendant's conduct.
C) arises only by an interference that is great enough to be condemned as unreasonable.
D) cannot arise from a lawful activity or business that is conducted in a lawful manner.
Q2) Due diligence is the process by which the buyer of property conducts a thorough investigation of the property and its uses to determine whether environmental or nuisance problems exist.
A)True
B)False
Q3) The primary federal agency responsible for federal environmental laws is the EPA. A)True B)False
Q4) Spot zoning may result in such inequality as to be condemned by the courts. A)True B)False
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Chapter 50: Leases
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Q1) A provision in a residential lease excusing a landlord from liability for damage caused by water, snow, or ice is __________.
A) enforceable
B) enforceable, but only in those areas of the United States that are unusually exposed to adverse weather conditions
C) void
D) voidable
Q2) If the sewer continually backed up through the toilets in the rented premises, the tenant could claim constructive eviction, but would be able to stay until the landlord fixed it.
A)True
B)False
Q3) Failure of a landlord to provide pest control as stated in the lease, despite numerous requests from tenants, is tantamount to: ___________.
A) a breach of the covenant of quiet enjoyment.
B) a physical eviction.
C) active waste.
D) a constructive eviction.
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Chapter 51: Decedents Estates and Trusts
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Q1) Tuttle died at age 96, leaving a will that she made at age 40 that provided that her three children would share her estate equally. At the time of her death, only one child, Anna, was living. Tuttle's two deceased children, Bill and Caroline, each had two children who were living at the time of Tuttle's death. Anna is claiming that she is entitled to the entire estate because the bequests to Bill and Caroline lapsed upon their deaths prior to Tuttle's death. How will the estate be settled?
Q2) Statutes often require that the attestation of witnesses be made in the presence of the testator and in the presence of each other.
A)True
B)False
Q3) If Bruce's will states, "I give my condo in Boise, Idaho to my sister Carolyn Harwood" he is giving her __________.
A) a general bequest.
B) an ademption.
C) a residuary.
D) a specific devise.
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