Business Ethics and Law
Chapter Exam Questions
Course Introduction
Business Ethics and Law explores the intersection of ethical principles and legal frameworks as they apply to contemporary business practices. The course examines the foundations of ethical decision-making, corporate social responsibility, stakeholder management, and regulatory compliance. Students will analyze case studies involving ethical dilemmas, legal obligations, and the consequences of unethical or unlawful conduct within organizations. Key topics include contracts, employment law, intellectual property, consumer protection, environmental regulation, and international business law. Through critical discussion and practical application, the course prepares students to navigate complex ethical and legal issues in the modern business environment.
Recommended Textbook
Business Law Today Standard Text and Summarized Cases 10th Edition by Roger LeRoy Miller
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Chapter 1: The Legal Environment
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Q1) There are legal questions involved when considering ways to raise capital so a business can grow.
A)True
B)False
Answer: True
Q2) The Uniform Commercial Code has been adopted, at least in part, in
A) all states.
B) forty-five states.
C) thirty-five states.
D) no state.
Answer: A
Q3) Statutory law includes state statutes and ordinances passed by cities and counties.
A)True
B)False
Answer: True
Q4) Businesspersons are expected to make decisions that are ethically sound.
A)True
B)False
Answer: True
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Chapter 2: Constitutional Law
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Q1) South Dakota, like other states, may regulate private activities to protect or promote the public order, health, safety, and general welfare under
A) the state's police powers.
B) the dormant commerce clause.
C) the due process clause.
D) the free exercise clause.
Answer: A
Q2) The First Amendment protects defamatory speech.
A)True
B)False
Answer: False
Q3) Because the Constitution does not specifically a right to privacy, this right is denied to people.
A)True
B)False
Answer: False
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Page 4
Chapter 3: Courts and Alternative Dispute Resolution
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Q1) Lyn files a suit against Karl. Karl denies Lyn's charges and sets forth his own claim that Lyn breached their contract and owes Karl money for the breach. Karl's claim is
A) a contrary charge.
B) a counterclaim.
C) a counterpoint.
D) a cross complaint.
Answer: B
Q2) Sandy, a resident of Illinois, wants to file suit against Carl, a resident of Kansas, over Carl's failure to pay Sandy for work on his house. The amount in dispute is $15,000. Under diversity of citizenship requirements
A) no court can exercise jurisdiction.
B) a state court cannot take jurisdiction because the amount in controversy is less than $25,000.
C) a federal court cannot take jurisdiction because the amount in controversy is more than $10,000.
D) a federal court cannot take jurisdiction because the amount in controversy is less than $75,000.
Answer: D
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Chapter 4: Torts and Cyber Torts
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Q1) Failure to live up to a standard of care may be an act or an omission.
A)True
B)False
Q2) Glen falsely accuses Hu of stealing from Island Tours, Inc., their employer. Glen's statement is NOT defamatory if
A) only Hu hears it.
B) a third party hears it.
C) the statement is published.
D) the statement is a lie.
Q3) Self-defense is a defense to negligence.
A)True
B)False
Q4) To commit an intentional tort, one person must intend to harm a certain person.
A)True
B)False
Q5) Class-action lawsuits are suits in which a number of persons join together to bring an action.
A)True
B)False
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Chapter 5: Intellectual Property and Internet Law
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Q1) The idea for "On Your Mark," a computer game featuring world-class athletic competition in extreme and unique contests, is protected by
A) copyright law.
B) patent law.
C) trademark law.
D) trade secrets law.
Q2) Information that is not or cannot be protected under trademark, patent, or copyright law may be protected under the law of trade secrets.
A)True
B)False
Q3) Wendy works as a weather announcer for a TV station under the character name Weather Wendy. Wendy can register her name as a
A) a certification mark.
B) a collective mark.
C) a service mark.
D) a trade name.
Q4) It is possible to copyright an idea.
A)True
B)False
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Chapter 6: Criminal Law and Cyber Crime
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Q1) Davis points a gun at Eton, threatening to shoot him if he does not steal from his employer, Freddy's Convenience Store, and give the stolen funds to Davis. Charged with theft, Eton can successfully claim, as a defense
A) nothing.
B) duress.
C) entrapment.
D) self-defense.
Q2) Farouk uses his computer to break into Global Financial Center's computer. Farouk is a
A) hacker.
B) phisher.
C) worm.
D) virus.
Q3) Bribing foreign officials to obtain favorable business contracts is not a crime.
A)True
B)False
Q4) The purpose of the exclusionary rule is to deter police from misconduct.
A)True
B)False
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Chapter 7: Ethics and Business Decision Making
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Q1) Ethical codes of conduct can set the ethical tone of a firm.
A)True
B)False
Q2) Focusing on a firm's short-term profits without considering the company's long-term needs may be acting unethically.
A)True
B)False
Q3) According to utilitarianism, an action that affects the majority adversely is morally wrong.
A)True
B)False
Q4) Rio Business Corporation pays potential clients, including private foreign companies and the representatives of foreign labor organizations to facilitate business. If Rio knows that the payments will be passed on to a foreign government, this practice is
A) illegal if the payments violate the Foreign Corrupt Practices Act.
B) legal because a third party acts as a "go-between."
C) legal because private parties are involved on both sides of the deal.
D) legal because the payments are intended to facilitate business.
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9
Chapter 8: International Law in a Global Economy
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Q1) Dumping is the exporting of environmentally polluting goods to a foreign market.
A)True
B)False
Q2) Yokio, Ltd., and Zeno, S.A., transact an international sale of goods. At the request of these parties, a court in Portugal resolves a dispute between them. A U.S. court will most likely honor the judgment
A) if it is consistent with U.S. laws and public policy.
B) if it is consistent with Portuguese laws and public policy.
C) if it does not benefit the U.S. to deny it.
D) under no circumstances.
Q3) Soleful Shoes, Inc. owns property in Somalia. The Somalian government seizes the property. In order for the seizure to be considered an expropriation and not a confiscation, the Somalian government must
A) pay just compensation to Soleful Shoes.
B) give Soleful Shoes at least thirty days notice of the seizure.
C) give Soleful Shoes at least ninety days notice of the seizure.
D) notify the U.S. government before the seizure.
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Page 10
Chapter 9: Nature and Classification
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Q1) Ellen offers to sell her math textbook to Julia for $50. Julia does not respond. Ellen and Julia do not have a contract because they lack the requirement of A) agreement.
B) capacity.
C) consideration.
D) legality.
Q2) Debit & Credit Accounting Services and Brickwork Construction Company negotiate a contract. Terms in the contract that are the subject of separate negotiation will be considered subordinate to A) standardized terms.
B) terms that can be understood only by lawyers and judges.
C) terms that are not negotiated separately.
D) none of the choices.
Q3) A voidable contract is a valid contract that can be avoided at the option of at least one of the parties to it.
A)True
B)False
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Chapter 9: Offer and Acceptance
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Q1) Under federal law, an e-signature is enforceable only if the contracting parties have agreed to use e-signatures.
A)True
B)False
Q2) Browse-wrap terms are arguably not enforceable.
A)True
B)False
Q3) Jack offers to sell Ben a new car for $10,000. Ben accepts the offer and sells his old car so that he will have money for the new one. Jack's offer is probably
A) revocable because the terms of the offer were not definite.
B) irrevocable because Ben sold his old car because of justifiable reliance on Jack's offer to sell him a new car.
C) revocable because any offer is revocable.
D) irrevocable because Jack's offer represents an opinion contract.
Q4) The death of an offeree does not terminate an offer.
A)True
B)False
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Chapter 11: Consideration, Capacity, and Legality
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Q1) Franzea is injured in an accident caused by Gentry. Gentry agrees to pay Franzea $2,500 if she agrees to release him from further liability. She agrees. If Franzea's damages ultimately exceed $2,500, she can collect
A) the balance from Gentry in a breach-of-contract suit.
B) the balance from Gentry in a tort suit.
C) the balance from Gentry on the ground of unforeseen difficulties.
D) nothing more from Gentry.
Q2) Gaye, a minor, signs a contract to buy a motorcycle from Hi-Valu Cycles by misrepresenting her age as twenty-one. Gaye fails to make the payments. Hi-Valu sues.
Ordinarily, Gaye can
A) not return the motorcycle nor avoid further liability.
B) not return the motorcycle but can avoid further liability.
C) return the motorcycle and avoid further liability.
D) return the motorcycle but cannot avoid further liability.
Q3) A preexisting duty may arise from a previous contract.
A)True
B)False
Q4) It is legal to charge any interest rate for an ordinary loan.
A)True
B)False
Page 13
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Chapter 12: Defenses to Contract Enforceability
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Q1) Beau sells a car to Cody without disclosing that the odometer, which reads 40,000 miles, was disconnected 80,000 miles ago. Beau is liable for A) duress.
B) fraud.
C) mistake.
D) undue influence.
Q2) Valley Tack Shop signs a contract with Gary's Boots and Saddles for delivery of five saddles that cost $200 each. To be enforceable under the Statute of Frauds, the written contract must designate A) the method of delivery.
B) the method of payment.
C) the quantity of saddles.
D) the seller.
Q3) An oral contract may be enforceable if enforcing the promise is the only way to avoid injustice.
A)True
B)False
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Page 14
Chapter 13: Third Party Rights and Discharge
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Q1) In all contracts, absolute promises are expressly conditioned.
A)True
B)False
Q2) A right can be assigned even if the assignment will significantly alter the risks or duties of the obligor.
A)True
B)False
Q3) Carol enters into a contract to hire Joanne to paint a portrait of Carol's favorite cat. Joanne agrees to do the portrait to Carol's satisfaction for $100. When Joanne finishes the portrait, Carol announces that she is not satisfied with the portrait because it does not look like her cat. Carol
A) must accept the portrait and pay Joanne $100.
B) must accept the portrait and pay Joanne $50.
C) must accept the portrait and pay Joanne $25.
D) does not have to accept the portrait or pay Joanne any money.
Q4) Performance that provides a party with most of the benefits of a contract, in spite of a deviation from the terms, is substantial performance.
A)True
B)False
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Chapter 14: Breach and Remedies
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Q1) Expenses that are caused directly by a breach of contract-such as those incurred to obtain performance from another source-are compensatory damages.
A)True
B)False
Q2) A contract may include a clause stating that no damages can be recovered for a certain type of breach.
A)True
B)False
Q3) Normally, when a nonbreaching party has been damaged by a breach of contract, he or she does not have a duty to mitigate those damages.
A)True
B)False
Q4) The injury suffered by a nonbreaching party due to the breach of a contract may be remedied by payment of compensatory damages.
A)True
B)False
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Page 16
Chapter 15: The Formation of Sales and Lease Contracts
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Q1) Roy's Chick'n Shack orders chicken from Standard Food Supplier, but Standard does not deliver. Roy's will probably be unable to enforce the agreement if the parties
A) did not limit the duration of the deal.
B) did not specify a payment term.
C) did not specify a quantity term.
D) have not begun to perform.
Q2) A buyer and a seller cannot normally have an insurable interest in identical goods at the same time.
A)True
B)False
Q3) For an item to be characterized as a "good" under the UCC, it must be intangible.
A)True
B)False
Q4) Under the UCC, if a contract is unilateral, the offeror must be notified of the offeree's performance.
A)True
B)False
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Chapter 16: Performance and Breach of Sales Lease Contracts
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Q1) Loomis Weaving Company contracts to sell sweaters to Style Mart stores. Before the sweaters are delivered, Style Mart indicates that it will not be able to pay. Loomis can resell the goods
A) either after finishing the job (and identifying the goods), or after stopping the job.
B) only after finishing the job and identifying the goods.
C) only if Loomis immediately stops the job.
D) under no circumstances.
Q2) If a seller asks a buyer to store nonconforming goods overnight, then the buyer is entitled to reimbursement for the costs involved.
A)True
B)False
Q3) A buyer may reject a seller's goods under any circumstances.
A)True
B)False
Q4) If a seller fails to deliver the goods, the buyer's damages do not include all losses resulting from this course of events.
A)True
B)False
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Chapter 17: Warranties and Product Liability
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Q1) A warranty against infringement is a promise by the seller that the product is free from any patent, trademark, or copyright claims of a third person.
A)True
B)False
Q2) John is an art dealer with special expertise in modern art. Rachel comes to John's gallery to purchase a modern art painting as an investment. John shows her several paintings that he says are high quality and will increase in value in the next ten years. John's statement is
A) an express warranty.
B) an implied warranty.
C) an opinion.
D) puffery.
Q3) A seller does not have to use words such as "warrant" to make an express warranty. A)True
B)False
Q4) A failure to exercise reasonable care is negligence.
A)True
B)False
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Page 19
Chapter 18: Negotiable Instruments: Transferability Liability
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Q1) To borrow money to finance the start-up of his business, Bob executes an instrument in favor of City Bank. For the instrument to be negotiable, the signature must be A) anywhere on the instrument. B) anywhere on the lower half of the instrument only. C) in the lower left-hand corner of the instrument only. D) in the lower right-hand corner of the instrument only.
Q2) A check "payable to the order of bearer" is neither an order instrument nor a bearer instrument.
A)True
B)False
Q3) Willy deposits $5,000 with Home State Bank on July 1, 2012. Home State Bank promises to repay Willy the $5,000 plus 3 percent annual interest on July 1, 2017. Home State Bank has issued Willy a A) certificate of deposit. B) cashier's check.
C) trade acceptance. D) draft.
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Chapter 19: Checks and Banking in the Digital Age
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Q1) Luc writes a check for $1,000 drawn on Ridgetop Bank and presents it to Bianca. Bianca presents the check for payment to Ridgetop Bank, which dishonors it for insufficient funds. The party most likely liable to Bianca is
A) Luc in a civil suit.
B) Luc in a criminal prosecution.
C) Ridgetop Bank in an administrative proceeding.
D) neither Luc nor Ridgetop Bank.
Q2) Ellen pays State Bank $500 plus a service fee to draw a check on itself payable to Paul's Plumbing. Which of the following parties is responsible for paying the check?
A) Only Ellen
B) Both Ellen and State Bank
C) Only State Bank
D) None of the parties
Q3) Each bank in a collection chain must pass a check on before noon of the day of its receipt.
A)True
B)False
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21
Chapter 20: Secured Transactions
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Q1) Future advances against a line of credit can be subject to the same collateral.
A)True
B)False
Q2) The method of perfecting a security interest does not depend on the classification of the collateral.
A)True
B)False
Q3) Clear Lake Credit Corporation lends funds to Donny, a consumer, to apply to the cost of a boat, which is the collateral for the loan. An enforceable security interest requires A) a written agreement and Clear Lake's possession of the boat.
B) a written agreement or Clear Lake's possession of the boat.
C) the boat seller's acknowledgement of the loan in writing.
D) Donny's possession of the boat.
Q4) The concept of a floating lien applies to a constantly changing inventory.
A)True
B)False
Q5) A financing statement cannot be the same as the security agreement.
A)True
B)False
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Chapter 21: Creditors Rights and Bankruptcy
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Q1) Thirty-one days before filing a petition in bankruptcy, Dee transfers property and makes payments that favor one creditor over another. These are A) affirmation agreements. B) preferences.
C) secured interests.
D) unsecured debts.
Q2) Refer to Fact Pattern 21-1. Nina may recover A) $0.
B) $30,000.
C) $50,000.
D) $60,000.
Q3) Anthony believes that he needs to obtain a Chapter 13 discharge in bankruptcy. A Chapter 13 case can be initiated by a filing of a voluntary petition by A) a creditor only.
B) a corporation only.
C) a debtor only.
D) a trustee only.
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Chapter 22: Mortgages Foreclosures After the Recession
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Q1) Loan flipping occurs when a lender convinces a homeowner to refinance soon after obtaining a mortgage.
A)True
B)False
Q2) Laurel borrows $150,000 from Marketplace Mortgage Loans to buy a home. The financing documents require Laurel to maintain the property, obtain homeowners' insurance, and pay all property taxes and other assessments through the lender. With respect to these terms, a court is most likely to
A) enforce them.
B) refuse to enforce them.
C) rescind them.
D) rewrite them.
Q3) Velma borrows $110,000 from Watershed Bank to buy a home. If she fails to make payments on the mortgage, the bank has the right to repossess and auction off the property securing the loan. This is
A) a short sale.
B) forbearance.
C) foreclosure.
D) the equitable right of redemption.
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Chapter 23: Agency Relationships in Business
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Q1) An agency can terminate once its purpose is achieved.
A)True
B)False
Q2) Brenda is a purchasing agent for Commodities Exchange Corporation. Dennis, a Commodities corporate officer, gives Brenda written authority to buy for the firm as many computers and peripheral devices as necessary. The next day, Dennis calls Brenda and tells her to buy only fifty notebook computers and nothing else. Brenda shows the written authority to E-Products, Inc., and enters into a contract with E-Products to buy sixty notebook computers and a selection of printers, scanners, and extra storage media. E-Products ships the order to Commodities. Is Commodities liable to E-Products under the contract? Is Brenda liable? In each case, if so, why? If not, why not?
Q3) For an agent's implied authority to be effective, a principal must ratify it.
A)True
B)False
Q4) The equal dignity rule requires that a principal and agent treat each other with "equal dignity."
A)True
B)False
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Page 25
Chapter 24: Employment, Immigration, and Labor Law
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Q1) All employers must provide their employees with up to twelve months of family or medical leave.
A)True
B)False
Q2) Phyllis intentionally injures herself while performing her job for Stone Cutters, Inc. Phyllis will be entitled to
A) full workers' compensations.
B) half of the normal workers' compensation.
C) 10 percent of the normal workers' compensation.
D) no workers' compensation.
Q3) The privacy rights of private-sector employees are governed by state law, which varies widely.
A)True
B)False
Q4) To hire employees from other countries, an employer must first obtain the approval of the U.S. Immigration and Customs Enforcement.
A)True
B)False
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Chapter 25: Employment Discrimination and Diversity
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Q1) Employers can consider mitigating measures or medications when determining if an individual has a disability that fits the definition in the Americans with Disabilities Act of 1990.
A)True
B)False
Q2) Personnel Staffing Corporation meets all of the requirements to be subject to the federal employment discrimination laws. Among these, the most important statute prohibiting discrimination against members of protected classes is
A) the Age Discrimination in Employment Act of 1967.
B) the Americans with Disabilities Act of 1990.
C) the National Labor Relations Act of 1935.
D) Title VII of the Civil Rights Act of 1964.
Q3) Pikabo files an employment discrimination suit against Quantitative Analysis, Inc., under the Civil Rights Act of 1964, based on its discharge of Pikabo. Possible relief includes
A) imprisonment.
B) reinstatement.
C) fines.
D) an order to shutdown the employer's business.
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Page 27
Chapter 26: Sole Proprietorships and Private Franchises
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Q1) Doc's Sports Club enters into a franchise agreement with Elite Fitness Centers that provides for termination at any time for "cause." Doc's fails to meet Elite's "Friends and Family" membership sales quota. Is this "cause" for termination? Explain.
Q2) A franchisor is the purchaser of a franchise.
A)True
B)False
Q3) A franchise is a contractual arrangement.
A)True
B)False
Q4) A franchisor can set the retail prices for the goods that a franchisee sells.
A)True
B)False
Q5) A franchisor's decision to terminate a franchise may be made in the normal course of business operations.
A)True
B)False
Q6) The duration of a franchise is a matter to be determined between the parties. A)True
B)False
28
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Chapter 27: All Forms of Partnership
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Q1) In a limited partnership, a limited partner has full responsibility for the partnership and for all its debts.
A)True
B)False
Q2) Kelly, Lars, and Mona agree to be partners in Neighborhood Delivery Service (NDS), splitting the profits equally. Kelly contributes 67 percent of the capital. When NDS is dissolved, its liabilities are greater than its assets. The losses are paid by
A) all of the partners in proportion to their capital contributions.
B) all of the partners in proportion to their shares of the profits.
C) Kelly because she contributed most of the capital.
D) Lars and Mona because they contributed the least of the capital.
Q3) Fay is admitted to Global Associates, an existing partnership. A partnership debt incurred before the date of her admission comes due. Fay is A) not liable for the debt.
B) only liable for the debt up to the amount of his capital contribution.
C) personally liable only to the extent the other partners do not pay.
D) personally liable to the full extent of the debt.
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Chapter 28: Limited Liability Companies Special Business
Forms
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Q1) Buyers Club is an incorporated cooperative. Like other incorporated cooperatives, Buyers Club distributes profits to its owners on the basis of A) the amount of capital they contribute.
B) the degree to which they participate in management.
C) their transactions with the cooperative.
D) the requirements of the state in which it was incorporated.
Q2) Location! Realty LLC is a limited liability company. Like other LLCs, for federal jurisdictional purposes, Location! Realty is most likely a citizen of A) all states.
B) every state in which its members are citizens.
C) no state.
D) only the state in which it was formed.
Q3) Like a corporation, the ownership of a joint stock company is represented by shares of stock.
A)True
B)False
Q4) A joint venture resembles a partnership but is taxed like a corporation.
A)True
B)False
30
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Chapter 29: Corporate Formation, Merger, and Termination
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Q1) Finn and Glenda want to form and do business as Hobby Crafts Corporation. A corporation is
A) a natural person.
B) a tangible thing.
C) an artificial legal person.
D) a visible radiance.
Q2) Wings2Go Corporation fails to hold an organizational meeting. In this circumstance, at common law Wings2Go is most likely
A) a corporation by estoppel.
B) a de facto corporation.
C) a de jure corporation.
D) ultra vires.
Q3) Any person who buys preferred stock has priority over a holder of common stock to payment on the corporation's dissolution.
A)True
B)False
Q4) Appraisal rights normally extend to regular mergers and consolidations.
A)True
B)False
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Chapter 30: Management and Ownership of a Corporation
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Q1) RayAnn is a corporate officer for Timmy's Trees, Inc. As a corporate officer, RayAnn is A) the head of the board of directors.
B) involved in the day-to-day operations of Timmy's Trees.
C) not involved in the day-to-day operations of Timmy's Trees.
D) in charge of selecting members of the board of directors.
Q2) The initial board of directors of a corporation is normally elected at the first annual shareholders' meeting by a majority vote of the shareholders.
A)True
B)False
Q3) Shareholders do not need to approve fundamental changes affecting the corporation before the changes can be effected.
A)True
B)False
Q4) A corporation's officers and other executive employees are hired by corporate shareholders.
A)True
B)False
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Chapter 31: Investor Protection, Insider Trading, Corp Gov
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Q1) A major problem facing the Securities and Exchange Commission is how to enforce the antifraud provisions of the securities laws in the online environment.
A)True
B)False
Q2) Corporate governance can be defined as the relationship between a corporation and its directors.
A)True
B)False
Q3) Private parties can sue violators of the Securities Act of 1933.
A)True
B)False
Q4) Flo-Thru Corporation is poised to issue securities that, under the Securities Act of 1933, are "exempt." This means that the securities can be sold
A) on the basis of a material omission or misrepresentation.
B) on the basis of nonpublic information.
C) within any six-month period by certain insiders.
D) without being registered.
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Chapter 32: Promoting Competition
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Q1) Listen Up! Corporation books and promotes concerts and other entertainment events, for which Listen Up! also sells tickets. In weighing a challenge to Listen Up!'s "monopolistic" ticket prices, a court looks at the relevant geographic market. This encompasses
A) only areas in which Listen Up! does not have monopoly power.
B) only areas in which Listen Up! has monopoly power.
C) the area in which Listen Up! and its competitors sell, and their customers buy, the tickets.
D) the entire United States in all cases.
Q2) A group boycott is not a per se violation.
A)True
B)False
Q3) North Mining Company and South Excavation Company agree to abide by the decisions of East Coast Financial Corporation as to their respective levels of production, markets, and prices, effectively reducing competition and increasing profits. This is most likely
A) a common, legal, time-honored type of business arrangement.
B) an illegal restraint on trade.
C) an innovative, legally efficient approach to doing business.
D) an outdated, but legal business trust.
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Chapter 33: Consumer and Environmental Law
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Q1) Manufacturers are required to report on any products intended for sale if the products have proved to be hazardous.
A)True
B)False
Q2) Major credit reporting agencies must provide consumers with free copies of their own credit reports every twelve months.
A)True
B)False
Q3) Ski Resorts, Inc., wants to add a new run to its facility in a national park on federal land. For this action, an environmental impact statement is A) prohibited.
B) required.
C) unnecessary.
D) voluntary.
Q4) Advertising will not be deemed deceptive so long as it appears to be based on factual evidence, even if it is not.
A)True
B)False
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Page 35
Chapter 34: Liability of Accountants Other Professionals
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Q1) Lebron, an attorney, allows a statute of limitations to lapse on a claim by Midwest Metal Fabrication Company, a client. Lebron A) can be held liable for malpractice.
B) has violated an ethical standard but cannot be held liable. C) is subject to criminal penalties under the statute of limitations. D) will be automatically disbarred.
Q2) Craig is an accountant whose clients include Digby Excavation Corporation. Elbert is Craig's attorney. Under the common law and by statute in many states, working papers that Craig develops when preparing financial reports for Digby are owned by A) Craig.
B) Digby.
C) Elbert.
D) no one-the papers must be destroyed immediately after use.
Q3) An accountant is not liable for a misleading statement that affects the price of a security if the accountant acted in good faith.
A)True
B)False
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Chapter 35: Personal Property and Bailments
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Q1) Wally asks Eddie if he can store his furniture in Eddie's garage while he serves a tour of duty with the U.S. Marines Corps. Eddie agrees. This is A) a bailment.
B) accession.
C) a gift.
D) abandoned property.
Q2) Rocco gives Sequoia a smartphone as a gift. Sequoia develops a new game app for the phone. She obtains intellectual property protection, and forms Titan Games, LLC, to make and market the game. Sequoia's acquisition of the game is by A) gift.
B) accession.
C) confusion.
D) production.
Q3) In most bailments, the bailee can retain the goods given by the bailor and return equivalent property.
A)True
B)False
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Chapter 36: Real Property and Landlord-Tenant Law
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Q1) Moby leases from National Theater Corporation a theater in which to stage a series of concerts. Ollie buys a ticket to the series. What distinguishes Moby, a tenant, from Ollie, a licensee, is
A) the exclusivity of possession.
B) the quiet enjoyment of rights.
C) the temporary nature of possession.
D) the title to the property.
Q2) Generally, contract doctrines apply to a landlord-tenant relationship.
A)True
B)False
Q3) Life tenants are persons who share ownership rights simultaneously.
A)True
B)False
Q4) Generally, a tenant must pay agreed-to rent even if the tenant moves out.
A)True
B)False
Q5) Even after a tenant assigns a lease, the tenant may be obligated to pay rent.
A)True
B)False
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Chapter 37: Insurance, Wills, and Trusts
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Q1) Sherman dies without a will, survived by his granddaughter Roxy and Roxy's brother Pio. Roxy and Pio are Sherman's
A) collateral heirs.
B) settlors.
C) trustees.
D) lineal descendants.
Q2) Reno is the beneficiary of a life insurance policy on Sula's life obtained from Traditional Insurance Company. The underwriter of this policy is A) Reno.
B) Sula.
C) Traditional.
D) the agent or broker through whom the policy was obtained.
Q3) Cliff dies without a will. His survivors include his spouse Dana and his two children, Efrem and Fay. Under applicable laws, Dana will probably receive
A) all of Cliff's estate.
B) none of Cliff's estate.
C) one-half of Cliff's estate.
D) one-third of Cliff's estate.
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