Business Law
Exam Solutions
Course Introduction
Business Law provides an overview of the legal principles governing the formation, operation, and dissolution of businesses. The course examines contracts, agency, sales, commercial paper, and business organizations such as partnerships, corporations, and limited liability companies. Students will explore the regulatory environment in which businesses operate, including employment law, intellectual property, and consumer protection. Through case studies and real-world scenarios, students gain practical insights into how legal issues impact business decisions and develop an understanding of ethical considerations in business law.
Recommended Textbook
Contemporary Business and Online Commerce Law 7th Edition by Henry R. Cheeseman
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41 Chapters
5608 Verified Questions
5608 Flashcards
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Page 2
Chapter 1: Legal Heritage and the Information Age
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123 Verified Questions
123 Flashcards
Source URL: https://quizplus.com/quiz/10985
Sample Questions
Q1) The United States Constitution is often referred to as a ________ document because it is so adaptable.
A) living
B) breathing
C) static
D) bedrock
E) tenuous
Answer: A
Q2) As established by the United States Constitution,the executive branch of government (the United States president)has the power to make the law.
A)True
B)False
Answer: False
Q3) The United States has never enacted an immigration quota law.
A)True
B)False
Answer: False
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Page 3
Chapter 2: Constitutional Law for Business and
E-Commerce
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126 Verified Questions
126 Flashcards
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Sample Questions
Q1) Procedural due process requires that the government must give a person proper notice and hearing of the legal action before that person is deprived of his or her life,liberty,or property.
A)True
B)False
Answer: True
Q2) Commercial speech and offensive speech both receive only limited protection under the U.S.Constitution.
A)True
B)False
Answer: True
Q3) In order to enter into a treaty with a foreign nation,the executive branch needs:
A) no further approval.
B) the approval of the Senate.
C) the approval of the House of Representatives.
D) the approval of the Senate and the House of Representatives.
E) the approval of the Senate and the Supreme Court.
Answer: B
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Chapter 3: Courts and Jurisdiction
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125 Verified Questions
125 Flashcards
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Sample Questions
Q1) If the United States Supreme Court decides to review a case,it issues a ________.
A) petition for certiorari
B) writ of certiorari
C) petition of absolution
D) writ of absolution
E) writ of sedition
Answer: B
Q2) State limited-jurisdiction trial courts are sometimes referred to as ________ trial courts.
A) inferior
B) superior
C) subordinate
D) predominant
Answer: A
Q3) There is concurrent state and federal jurisdiction for diversity of citizenship cases so long as the minimum amount in controversy is met.
A)True
B)False
Answer: True
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Page 5
Chapter 4: Judicial, Alternative, Administrative, and
E-Dispute Resolution
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121 Verified Questions
121 Flashcards
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Sample Questions
Q1) Depositions consist of oral questions answered orally and both parties and witnesses may be deposed.
A)True
B)False
Q2) In general,an appellate court might typically reverse which of the following?
A) the trial court's findings of fact
B) the trial court's conclusions of law
C) exclusion of hearsay evidence by the trial court judge
D) the trial court judge's acknowledgement of a witness' privilege against self-incrimination
E) the jury's findings of fact
Q3) Assume that due to another person's intentional act,you have been injured.You have been inconvenienced,experienced pain and suffering,have medical bills and lost money due to an inability to work for a few weeks.Naturally,you want to be compensated and at a minimum recover your out of pocket costs.Assume that the person that harmed you was homeless,had no assets and was out of work.What should you consider before proceeding with the lawsuit? Would your answer be different if your assailant was a poor college student?
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Chapter 5: Torts and Strict Liability
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155 Verified Questions
155 Flashcards
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Sample Questions
Q1) A false arrest is also a false imprisonment,but not all false imprisonments are also false arrests.
A)True
B)False
Q2) The doctrine that shifts the burden of proof from the plaintiff to the defendant is:
A) negligence per se.
B) res ipsa loquitur.
C) apparent negligence.
D) Good Samaritan.
E) negligence res ipsa.
Q3) If Carol,a heart surgeon,is sued for negligently driving her car,she will be held to a reasonable heart surgeon standard when establishing the duty of care owed.
A)True
B)False
Q4) Good Samaritan laws do not generally protect persons who are not medical professionals and who have not had training in CPR.
A)True
B)False
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Chapter 6: Criminal Law and Cyber Crimes
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152 Verified Questions
152 Flashcards
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Sample Questions
Q1) Murder is defined as the unlawful killing of a human being by another with
A) mala prohibita
B) mala in se
C) malice aforethought
D) malice afterthought
E) reasonable foreseeability
Q2) In most crimes,it is the conduct,rather than the intent behind the conduct,that determines whether the defendant committed the crime.
A)True
B)False
Q3) In a criminal lawsuit,a private party is the plaintiff.
A)True
B)False
Q4) Most real property is subject to larceny.
A)True
B)False
Q5) In a larceny,the taking is the actus reus.
A)True
B)False
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Chapter 7: Intellectual Property and Cyber Piracy
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155 Verified Questions
155 Flashcards
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Sample Questions
Q1) The patent term begins to run from the date the patent is issued.
A)True
B)False
Q2) The U.S.Court of Appeals for the Federal Circuit was created to promote diversity in patent laws.
A)True
B)False
Q3) A decertification mark is a mark usually owned by a nonprofit cooperative or association.
A)True
B)False
Q4) A collective membership mark is owned by an organization,such as an association,whose members use it to identify themselves with a level of quality or accuracy or other characteristics set by the organization.
A)True
B)False
Q5) In order to receive copyright protection,a work must be marked as being copyrighted.
A)True
B)False
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Chapter 8: Ethics and Social Responsibility of Business
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134 Verified Questions
134 Flashcards
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Sample Questions
Q1) Kantian ethics can best be characterized by:
A) the consultation of an outside source, such as a book or person, for guidance.
B) the belief that the moral rules should be determined by persons who have a "veil of ignorance" about their place or station in society.
C) the belief that a person must decide what course of action is proper based on that person's own set of beliefs or feelings.
D) determining which course of action produces the greatest amount of good for the greatest number of people.
E) universal rules that are based on consistency and reversibility.
Q2) Which of the following would not be an example of ethical fundamentalism?
A) basing your actions on the speeches made by Martin Luther King
B) modeling your life on the Boy Scout Code and Oath
C) looking to the Bible for advice when making a decision
D) reading five books on ethics and deciding to follow your heart and instincts because you are confused and disappointed by what you read
E) forming your opinions based on parts of the Bible, the Torah and the Koran
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Chapter 9: Nature of Traditional and E-Contracts
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Sample Questions
Q1) Offers for both bilateral and unilateral contracts involve a promise by the offeror.
A)True
B)False
Q2) Frank says to Mary,"If you wash every window in my house today,I'll pay you $200.I don't care if you do it,but there is $200 in it for you if you do." Mary washes 12 of the 20 windows in Frank's house by 2:00 p.m.At this point:
A) Frank can revoke his offer to pay Mary the $200 for washing the windows.
B) Mary is obligated to finish washing the windows.
C) Frank cannot revoke his offer to pay Mary $200 for washing the windows.
D) no contract can be established based upon the given facts.
E) Frank and Mary have a formal, executed contract.
Q3) Which of the following is not a formal contract?
A) a contract under seal
B) a recognizance
C) a negotiable instrument
D) a letter of credit
E) a new car purchase contract
Q4) Why are contracts and strong contract law important to business?
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Page 11
Chapter 10: Agreement and Consideration
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Sample Questions
Q1) Which of the following is a requirement of a valid offer?
A) It must be unambiguous.
B) It must be written.
C) It must follow the mirror-image rule.
D) It must be unambiguous, and it must be written.
E) It must be written, and it must follow the mirror-image rule.
Q2) There is an existing contract calling for Seller to deliver 1,000 widgets to Buyer.Buyer says to Seller,"I would like to buy 100 additional units at the same price." Seller responds,"We promise to sell you the 100 extra units if we decide not to sell them to other customers." What is true regarding only the sale of the extra 100 units?
A) There is no consideration due to an illusory promise.
B) There is no consideration due to a preexisting duty.
C) There is no consideration due to a past consideration.
D) There is consideration due to promissory estoppel.
E) There is consideration due to a legal detriment on both sides.
Q3) According to the mailbox rule,acceptance is effective when it is dispatched,even if it is lost in the transmission.
A)True
B)False
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Page 12
Chapter 11: Capacity and Legality
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143 Verified Questions
143 Flashcards
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Sample Questions
Q1) Which of the following is not a basis on which a court could order a remedy in connection with an illegal contract?
A) a party was justifiably ignorant of the law
B) a party entered into the illegal contract because of fraud
C) after the contract was formed one of the parties attempted to prevent the performance of the illegal act
D) one party would lose more than the other if the court took no action
E) one party is less at fault than the other party for entering into the illegal contract
Q2) All states have usury law prohibiting the charging of illegal interest rates on all loans.
A)True
B)False
Q3) Which of the following is generally true about exculpatory clauses?
A) They are not valid with respect to intentional acts.
B) The test is if they are reasonable in time, scope and geographic area.
C) They are always found to be valid.
D) They are not valid for ordinary negligence.
E) They are never valid.
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Chapter 12: Genuineness of Assent and Statute of Frauds
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168 Flashcards
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Sample Questions
Q1) What does "incorporation by reference" do in the context of contract law?
A) It identifies the parties to a contract.
B) It dictates that the court apply equitable principles, rather than legal principles, to resolution of any dispute arising between the parties.
C) It makes separate writings part of a contract's terms.
D) It makes the Statute of Frauds inapplicable to the contract.
E) nothing as far as the Statute of Frauds is concerned, because incorporation cannot be used to satisfy the Statute of Frauds
Q2) Under which of the following situations can a party rescind a contract?
A) a unilateral mistake of fact
B) a unilateral mistake of law
C) fraud in the inducement
D) a mutual mistake of value
E) a mutual mistake of a non-material fact
Q3) In a situation involving undue influence,the dominant party is known as the servient party.
A)True
B)False
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Chapter 13: Third-Party Rights and Discharge
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150 Verified Questions
150 Flashcards
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Sample Questions
Q1) The right to sue another party for a violation of personal rights can usually be assigned.
A)True
B)False
Q2) What is the legal significance of whether a delegation of duties is an assumption of duties or a declaration of duties?
A) It determines whether the delegator remains liable for the performance of the duty.
B) It determines whether the duty is one that can be delegated.
C) It determines whether the delegator must pay the delegatee to perform the duty.
D) It determines whether the delegatee is liable to the obligee for failure to perform.
E) It determines whether notice of the delegation must be given to the obligee.
Q3) Usually,a person cannot assign a currently nonexistent right that he or she expects to have in the future.
A)True
B)False
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15
Chapter 14: Breach of Contract and Remedies
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143 Verified Questions
143 Flashcards
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Sample Questions
Q1) What distinguishes an anticipatory breach from other breaches?
A) It involves a breach by each party to the contract.
B) It entitles the non-breaching party to consequential damages.
C) It occurs in connection with substantial performance.
D) It is a foreseeable breach.
E) It occurs prior to the time that performance is due.
Q2) If the exchanged consideration is consumed or otherwise unavailable,there cannot be a valid restitution following a rescission of the contract.
A)True
B)False
Q3) Monetary damages are recoverable only when a material breach of contract has occurred.
A)True
B)False
Q4) You have been offered and accepted a job with a salary of $50,000.When the contract of employment is typed,an error is made and the salary is listed as $55,000.Since your employer made the mistake,it has no remedy and you get the $55,000.
A)True
B)False
Page 16
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Chapter 15: Digital Law and E-Commerce
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114 Verified Questions
114 Flashcards
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Sample Questions
Q1) The CAN-SPAM Act represents a deregulatory approach to government oversight of the Internet.
A)True
B)False
Q2) Under the Electronic Signature in Global and National Commerce Act,one of the ways that a digital signature can be verified is by something the signatory knows,such as a secret password.
A)True
B)False
Q3) In an e-license arrangement,the owner of the program or application is the e-licensee,and the owner of the computer or digital device to whom the license is granted is the e-licensor.
A)True
B)False
Q4) The Uniform Computer Information Transactions Act was passed by the U.S.Congress in 1999.
A)True
B)False
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Chapter 16: Formation of Sales, Lease, and E-Contracts
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127 Verified Questions
127 Flashcards
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Sample Questions
Q1) Under Article 2 of the UCC,what is an accommodation shipment?
A) any accidental or intentional shipment of nonconforming goods
B) any shipment of nonconforming goods that the seller intends the buyer to accept as a substitute
C) any shipment of nonconforming goods that the seller notifies the buyer is being offered as a substitute for the goods ordered
D) any shipment of goods sent pursuant to a court order resulting from a breach
E) any accidental shipment of nonconforming goods
Q2) A finance lease is a three-party transaction.
A)True B)False
Q3) Both sales and service contracts are covered by the Article 2 of the UCC.
A)True
B)False
Q4) In a contract dispute,would a non-merchant benefit more from the provisions of the UCC Article 2 and Article 2A or under the common law?
Q5) Under the UCC,an electronic record is not the same as writing.
A)True
B)False
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Chapter 17: Performance of Sales, Leases and E-Contracts
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128 Verified Questions
128 Flashcards
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Sample Questions
Q1) Which of the following is a conditional sale?
A) entrustment sale
B) good faith sale
C) a sale by a merchant to a buyer in the ordinary course of business.
D) consignment
E) bailment
Q2) A person with voidable title can pass good title to a good faith purchaser or good faith subsequent lessee.
A)True
B)False
Q3) If a buyer presents a bill of lading to a bailee and the bailee refuses to deliver the goods,the risk of loss remains with the seller.
A)True
B)False
Q4) What is the common law rule regarding risk of loss? How did the UCC change the common law rule? Which do you think is easier to implement?
Q5) Under the common law,the risk of loss is always on the seller.
A)True
B)False
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Chapter 18: Remedies for Breach of Sales and Lease Contracts
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Sample Questions
Q1) A sales contract that requires the seller to deliver goods to the buyer's place of business is a ________ contract.
A) performance
B) shipment
C) destination
D) due-on-sale
E) sale-on-approval
Q2) Liquidated damages under the UCC:
A) are not permissible.
B) are permissible any time both parties have agreed to them.
C) are permissible only if other remedies are inadequate.
D) are unconscionable.
E) are permissible if they are reasonable in light of the anticipated or actual harm caused by the breach, the difficulties of proof of loss, and the inconvenience or non-feasibility of otherwise obtaining an adequate remedy.
Q3) An installment contract is one in which payment for the goods is made over time in a series of agreed-upon payments.
A)True
B)False
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Chapter 19: Warranties and Product Liability
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129 Verified Questions
129 Flashcards
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Sample Questions
Q1) Garden Solutions has invented a new kind of garden cart for hauling away branches,limbs and other yard and garden waste.This cart is taller than other designs,and thus has a higher capacity.In addition,it folds for compact storage.These features,unfortunately,make this cart harder to handle and less stable than other models.Bob purchased one of these carts and has been using it in his yard for several months.On several occasions,when heavily loaded,the cart has tipped over.In one case it almost fell onto Bob,but he was able to escape.In the owners' manual there are warnings against overloading the cart,and one warning that material placed in the cart should be no higher than the side walls of the cart.There are no warnings on the cart itself.One day Bob has the cart heavily loaded with materials extending approximately a foot above the side walls.While pushing the cart,one of the wheels hits a rock and the cart tips backwards and falls onto Bob.He suffers several injuries,including a puncture wound from one of several protruding bolts on the exterior of the cart.Bob had wondered why the bolts were not installed in the opposite way,with the protruding bolt on the inside of the trailer,or made with a less-menacing design.These bolts were used for the hinges that allowed the cart to fold for storage.Bob has filed a products liability suit against Garden Solutions.Discuss this case,including any defenses that Garden Solutions might raise.
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Chapter 20: Creation and Transfer of Negotiable Instruments
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Sample Questions
Q1) Order paper that is indorsed in blank becomes bearer paper.
A)True
B)False
Q2) Under the UCC,a negotiable instrument may provide that it is payable in foreign money.
A)True
B)False
Q3) A negotiable instrument may be a conditional promise or order to pay.
A)True
B)False
Q4) The words of negotiation,"pay to the order of," are needed for a special indorsement. A)True
B)False
Q5) Examples of negotiable instruments include checks and promissory notes.
A)True
B)False
Q6) Why are there so many different kinds of indorsements? Why is a restriction in an indorsement that limits payment to the named payee not effective? Should not the parties be allowed to set these terms between themselves?
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Chapter 21: Holder in Due Course and Liability of Parties
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Sample Questions
Q1) An accommodation party may sign an instrument guaranteeing collection rather than payment of an instrument.In this situation,the accommodation party is ________ liable on the instrument.
A) primarily
B) secondarily
C) unconditionally
D) never
E) exclusively
Q2) Can transfer warranties be disclaimed?
A) no, they cannot be disclaimed for any negotiable instruments
B) yes, they can be disclaimed for any negotiable instruments
C) yes, they can be disclaimed, but only by holders in due course
D) yes, they can be disclaimed, but only for bearer instruments
E) yes, they can be disclaimed, but only for instruments other than checks
Q3) When does a forgery prevent a holder from qualifying as a holder in due course?
A) never
B) if there was apparent evidence of the forgery
C) only if the forgery involved a signature
D) only if the forgery involved the price of goods
E) All forgeries prevent a holder from qualifying as a holder in due course.
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Chapter 22: Banking System, E-Money, and Financial Reform
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Sample Questions
Q1) Uniform Commercial Code Section 3-104(f)defines a check as an order by the drawer to the drawee bank to pay a specified sum of money from the drawer's checking account to the named payee (or holder).
A)True
B)False
Q2) A principal-agent relationship is formed between a customer and the bank if a deposit is a check that the bank must collect for the customer.
A)True
B)False
Q3) When a check is certified,the certification acts as a discharge regarding the drawer's liability on the check.
A)True
B)False
Q4) With a certified check,the certification expires when the check becomes stale. A)True
B)False
Q5) Only the drawer can order a stop-payment order.
A)True
B)False
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Chapter 23: Credit and Secured Transactions
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Sample Questions
Q1) Assume Bobby wants to buy a house priced at $150,000.He pays $50,000 down,and borrows $100,000 from First Bank.On January 2,Bobby gives First Bank a mortgage on the home for $100,000,but First Bank forgets to record the mortgage until August 1.On March 1 Bobby obtains a home equity loan of $100,000 from Second Bank.Bobby does not tell Second Bank that there is another loan outstanding on the house.Second Bank records a mortgage on the home on March 2.Bobby defaults on both loans and leaves town.Assuming the home can be sold for $150,000,who would be entitled to those funds,and why?
Q2) Generally,if two creditors have perfected security interests in the same collateral,which has the superior right (priority)?
A) the first to perfect
B) the first to attach
C) the first to sue the debtor
D) the first to repossess the collateral
E) they have equal priority
Q3) Mechanic's liens are exempt from the rules permitting defaulting debtor's the right of redemption.
A)True
B)False
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Page 25
Chapter 24: Bankruptcy and Reorganization
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Sample Questions
Q1) In a Chapter 11 bankruptcy,the creditors' committee is usually composed of:
A) all unsecured creditors, and the three largest secured creditors.
B) the seven largest unsecured creditors.
C) the seven largest unsecured creditors, and all secured creditors.
D) the three largest secured creditors, and the three largest unsecured creditors.
E) the four largest unsecured creditors.
Q2) A liquidation bankruptcy is also known as straight bankruptcy.
A)True
B)False
Q3) Which of the following is not part of the "fresh start" in bankruptcy?
A) protecting debtors from creditors' abusive actions in collecting past debts
B) preventing certain creditors from gaining an unfair advantage over other creditors in the collection process
C) protecting creditors from debtor actions that would diminish the value of the bankruptcy estate
D) preserving existing business relations
E) limiting the debtor's acquisition of new debt following the bankruptcy discharge
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Chapter 25: Agency Law
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Sample Questions
Q1) Someone who is authorized to act on behalf of another is generally known as a(n):
A) agent.
B) independent contractor.
C) employee.
D) surety.
E) principal.
Q2) A ________ power of attorney limits the agent to those acts specifically enumerated by the agreement.
A) limited
B) qualified
C) special
D) conditional E) truncated
Q3) The legal rule of imputed knowledge means that the principal is assumed to know what the agent knows.
A)True
B)False
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Page 27
Chapter 26: Small Business, Entrepreneurship, and Partnerships
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Sample Questions
Q1) Which of the following is true about the Uniform Partnership Act?
A) It is the federal statute that addresses partnership law.
B) It has been adopted by all of the states.
C) It has been adopted by most states.
D) All of its provisions govern every partnership agreement formed in states where the Act is applicable.
E) It is currently "persuasive authority" only, since it has not yet been adopted by any of the states, and is therefore not legally binding.
Q2) If a partnership agreement specifies how losses are to be divided,but is silent with respect to the division of profits,the profits are to be divided in the same manner as losses.
A)True
B)False
Q3) Why should the death or withdrawal of a partner result in dissolution of a partnership?
Q4) A person may be both a general partner and a limited partner.
A)True
B)False
Page 28
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Chapter 27: Corporate Formation and Financing
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Sample Questions
Q1) A corporation cannot enter into or enforce contracts.
A)True
B)False
Q2) Which of the following statements is true?
A) The number of shares the corporation is authorized to issue is indicated in the articles of incorporation.
B) A corporation may not repurchase its own shares after they have been issued.
C) A corporation may vote its treasury stock.
D) A corporation must sell all of its authorized stock.
E) Any treasury stock shares acquired by a corporation cannot be reissued.
Q3) A ________ is a short-term debt security with a maturity of five (5)years or less.
A) debenture
B) bond
C) note
D) promissory note
E) primogeniture
Q4) The shareholders do not have the power to terminate a corporation.
A)True
B)False
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Chapter 28: Corporate Governance and Sarbanes-Oxley Act
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Sample Questions
Q1) The board of directors of a corporation is appointed by the executives of the corporation.
A)True B)False
Q2) The Sarbanes-Oxley Act makes it a crime for any person to knowingly alter,destroy,mutilate,conceal,or create any document to impair,impede,influence,or obstruct any federal investigation.
A)True B)False
Q3) Which of the following is not one of the common committees found on boards of directors?
A) audit committee
B) nominating committee
C) litigation committee
D) dividends committee
E) executive committee
Q4) Notice of a shareholders' meeting is required to be given for both annual and special meetings.
A)True B)False
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Chapter 29: Corporate Acquisitions and Multinational Corporations
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126 Verified Questions
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Q1) A tender offer can be made for all or a portion of the shares of the target corporation.
A)True
B)False
Q2) State antitakeover statutes apply to corporations that are incorporated in the state.
A)True
B)False
Q3) Which of the following is not a possible consequence of including fraudulent information in a proxy solicitation?
A) a criminal action initiated by the justice department
B) fines imposed on shareholders who granted proxies
C) a civil action by the Securities and Exchange Commission
D) an order requiring a new election on the matter for which proxies were sought
E) a suit by an injured shareholder for damages from the wrongdoer
Q4) In a merger,the surviving corporation gains all the rights,privileges,powers,duties,obligations,and liabilities of the merged corporation.
A)True
B)False
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Chapter 30: Limited Liability Company and Limited Liability Partnership
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Q1) Which of the following need not be included in a limited liability company's articles of organization?
A) the address of the LLC's initial office
B) the name and address of the initial agent for service of process
C) the business purpose(s) of the LLC
D) the name and address of each organizer
E) whether the LLC is to be a manager-managed LLC
Q2) Which of the following is not true regarding the Uniform Limited Liability Company Act?
A) The Act codifies limited liability company law.
B) The Act was issued by the National Conference of Commissioners of Uniform State Laws.
C) The Act is binding on any state that allows limited liability companies.
D) The Act covers most problems that arise in the formation, operation, and termination of limited liability companies.
E) The Act was issued in 1995.
Q3) An LLC is a separate legal entity distinct from its members.
A)True
B)False
Page 32
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Chapter 31: Franchise and Special Forms of Business
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Q1) A franchise agreement usually contains a license that grants the franchisee the right to use certain intellectual property that is owned by the franchisor.
A)True
B)False
Q2) The misappropriation of a trade secret is called ________.
A) bad faith
B) fraud
C) unfair competition
D) misdealing
E) dilution
Q3) The parties participating in a joint venture have the right to engage in the management of the joint venture,based upon the amount of their capital contributions.
A)True
B)False
Q4) Why do you think that franchises have become so popular over the past few decades? Are there any policy implications for the increasing use of franchises?
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Page 33
Chapter 32: Investor Protection,E-Securities
Transactions,and Wall Street Reform
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Q1) To establish a "due diligence" defense,the defendant must prove that after reasonable investigation,he or she had reasonable grounds to believe and did believe that,at the time the registration statement became effective,the statements contained therein were true and there was not omission of material facts.
A)True
B)False
Q2) The Securities and Exchange Commission is an administrative agency composed of five (5)members who are appointed by the United States president.
A)True
B)False
Q3) The Securities and Exchange Commission was created as part of the Securities Act of 1933.
A)True
B)False
Q4) Under the "private placement" exception to the registration of securities,the limitation on the number of investors applies to non-accredited,but not accredited,investors.
A)True
B)False
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Chapter 33: Antitrust Law
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Sample Questions
Q1) Under Section 2 of the Sherman Act,monopolies are not outlawed,although acts of monopolizing are outlawed.
A)True
B)False
Q2) From the 1980s through the first decade of the 2000s,government enforcement of antitrust laws was more relaxed.
A)True
B)False
Q3) Although the federal government has enacted antitrust laws,most antitrust actions are brought under state law.
A)True
B)False
Q4) Determining the line of commerce that will be affected by the merger involves defining the relevant product or service market.
A)True
B)False
Q5) All restraints of trade are unlawful.
A)True
B)False
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Chapter 34: Consumer Safety, Consumer Financial
Protection, and Environmental Protection
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Sample Questions
Q1) Ordinary household soap is an example of a cosmetic subject to Food and Drug Administration regulation.
A)True
B)False
Q2) The Clean Water Act regulates the temperature of water discharged into public waterways.
A)True
B)False
Q3) Would it be better if proof of actual deception was required in order to prove a "false and deceptive" advertising claim under Section 5 of the Federal Trade Commission Act? Is it unfair to penalize advertisers when no actual deception can be shown?
Q4) In addition to federal laws,there are many state statutes that address environmental protection.
A)True
B)False
Q5) The Federal Water Pollution Control Act,as amended,is known as the Clean Water Act.
A)True
B)False
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Chapter 35: Labor, Worker Protection, Employment, and Immigration Law
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Sample Questions
Q1) The placement of a child with an employee for adoption or foster care is not a situation covered by the Family and Medical Leave Act.
A)True
B)False
Q2) Which of the following is false regarding the Family and Medical Leave Act?
A) The act is not a federal law, but it has been adopted by over half of the states.
B) To be covered by the act, an employee must have worked for the covered employer for at least one year, and he or she must have performed more than 1,250 hours of service during the previous twelve-month period.
C) Employers are required to provide up to twelve weeks of leave for a covered employee during any twelve-month period.
D) Leave under the act is unpaid leave.
E) Leave because of the birth of a child cannot be taken intermittently, unless the employer agrees.
Q3) The United States enacted the Fair Labor Standards Act in 1968.
A)True
B)False
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Page 37
Chapter 36: Equal Opportunity in Employment
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Q1) Under Title VII of the Civil Rights Act of 1964,an employer is under a duty to reasonably accommodate the religious observances,practices,or beliefs of its employees if doing so does not cause an undue hardship on the employer.
A)True
B)False
Q2) In determining whether an accommodation is "reasonable" under the Americans with Disabilities Act,an employer's size and financial resources are irrelevant.
A)True
B)False
Q3) When the Civil Rights Act of 1964 was passed,it specifically protected women from being discriminated against on the basis of pregnancy.
A)True
B)False
Q4) United States citizens employed by U.S.-controlled companies in foreign countries are covered by Title VII of the Civil Rights Act of 1964.
A)True
B)False
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Page 38
Chapter 37: Personal Property, Bailment, and Insurance
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Q1) Which of the following is true when someone accidentally makes an improvement to the personal property of another where the owner was unaware of the improvement until after it had been made?
A) The property owner gets to keep the improvement in all circumstances, and is not required to pay for it.
B) The property owner gets to keep the improvement in all cases, but must pay the party who improved it the reasonable value of the improvement.
C) The party who made the improvement can remove it if this is possible; otherwise, the owner of the property gets to keep the improvement and is not required to pay for it.
D) The party who made the improvement can remove it if such removal is possible; otherwise, the owner of the property gets to keep the improvement, but must pay the party who improved it the reasonable value of the improvement.
E) The party who made the improvement must be paid for the improvement, so long as it is undisputed that the fair market value of the property has been increased as a result of the improvement.
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Chapter 38: Real Property, Landlord-Tenant Law, and Land Use Regulation
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Sample Questions
Q1) If a person owns real property in fee simple,his or her ownership is finite in duration.
A)True
B)False
Q2) What is the distinguishing feature of joint tenancy?
A) the right of survivorship
B) the right to pass the interest by will
C) the right to have co-owners in the property
D) that only married couples can own property this way
E) that the interests of both parties terminate upon the death of one of the parties
Q3) Personal property can be transformed into real property,and real property can be transformed into personal property.
A)True
B)False
Q4) The type of estate that an owner possesses is determined from the deed,will,lease,or other document that transferred the ownership rights to him or her.
A)True
B)False
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Chapter 39: Family Law, Wills, and Trusts
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Sample Questions
Q1) No state recognizes marriage between persons of the same sex.
A)True
B)False
Q2) If a marriage is annulled,there can be no further obligation to pay spousal support.
A)True
B)False
Q3) Jan has two daughters,Ann and Betty.Each of these daughters has two sons.While all of these persons are living,Jan writes a will leaving her entire estate to her "lineal descendants,per stirpes." After Jan writes this will,the older daughter,Ann,dies.Jan dies next.If the value of Jan's estate is $120,000,how much does Ann's older son receive?
A) $20,000
B) $24,000
C) $30,000
D) $36,000
E) $40,000
Q4) A gift of real estate by will is called a devise.
A)True
B)False
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Chapter 40: Accountants' Liability
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Sample Questions
Q1) The Ultramares doctrine is the majority rule for accountants' liability for negligence in the United States.
A)True
B)False
Q2) Sterling and Company,LLP,has just established its business as the newest accounting firm in town.There are eight general partners and a number of new graduates hired as associates.They intend to specialize in audits of public companies.Which of the following is not correct with regard to how Sterling and Company,LLP needs to conduct its business?
A) It must register with the Public Company Accounting Oversight Board.
B) It must retain all audit papers for a period of at least ten years.
C) It must be sure to have a second partner review and approve audit reports prepared by the firm.
D) It must assure that the auditors revolve off the audits every five years.
E) It must refrain from providing any non-audit services to its clients other than tax preparation.
Q3) There is no accountant-client privilege under federal law.
A)True
B)False
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Page 42
Chapter 41: International and World Trade Law
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Sample Questions
Q1) The EU Commission is independent of its member nations.
A)True
B)False
Q2) A treaty is an agreement or a contract between two (2)or more nations that is formally signed by an authorized representative and ratified by the supreme power of each nation.
A)True
B)False
Q3) A farmer's cooperative in North Dakota enters into a contract to sell wheat to the government of Thailand.If a dispute arises under the contract,the farmers' cooperative can:
A) sue in a United States court, because neither the act of state doctrine nor sovereign immunity would apply.
B) not sue in a United States court, because of the act of state doctrine.
C) not sue in a United States court, because of sovereign immunity.
D) not sue in a United States court, because of comity.
E) not sue in a United States court, because of international sovereignty.
Q4) The International Court of Justice is also called the League of Nations.
A)True
B)False
Page 43
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