Business Law for Accountants
Exam Answer Key
Course Introduction
Business Law for Accountants introduces students to the fundamental principles of law relevant to the practice of accountancy. The course examines essential legal topics such as contracts, agency, torts, business organizations, the regulatory environment, and the legal implications of financial transactions. Emphasis is placed on the legal responsibilities and ethical duties of accountants and auditors, including issues related to professional liability, fraud, and compliance. Students will develop analytical skills to identify and address legal issues encountered in accounting and business settings, preparing them for informed decision-making and effective communication with legal professionals.
Recommended Textbook
Business Law with UCC Applications 14th Edition by Paul A. Sukys
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Chapter 1: Ethics, Social Responsibility, and the Law
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Sample Questions
Q1) Negative rights derive from an outside source that has emerged within society.
A)True
B)False
Answer: False
Q2) Law consists of values that govern a society's attitudes toward right and wrong.
A)True
B)False Answer: False
Q3) The theory of the ____________ says that right and wrong have no intrinsic value, but instead are determined by circumstance, situation, or even personal preference.
A) ethical relativism
B) realistic ethics
C) social ethics
D) market value ethics
Answer: A
Q4) A prescriptive theory explains how to create values that benefit society.
A)True
B)False Answer: True
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Chapter 2: Sources of the Law
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Q1) The law is a delicate balancing act between the power of the state and the rights of individuals.
A)True
B)False
Answer: False
Q2) A business asks a court to interpret the way in which a newly enacted shoplifter detention statute will be applied if the business, at some future point, detains a suspected shoplifter. The court may:
A) issue an advisory memorandum.
B) convene a conference of business and consumer representatives.
C) not interpret the statute until a lawsuit is filed challenging the statute.
D) ask the legislature to issue an advisory memorandum.
Answer: C
Q3) A compilation of all the statutes of a particular state or the federal government is known as a code.
A)True
B)False
Answer: True
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4
Chapter 3: The Judicial Process and Cyber-Procedure
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Q1) The courts are judicial tribunals that meet in a regular place and apply the law in an attempt to settle disputes by weighing the arguments presented by advocates for each party.
A)True
B)False
Answer: True
Q2) During a(n) ____________, the defendant is formally charged with a crime and can either plead guilty or not guilty.
A) indictment
B) preliminary hearing
C) arraignment
D) initial appearance
Answer: C
Q3) Formal criminal charges may be brought against a defendant in state court without a grand jury being involved.
A)True
B)False
Answer: True
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Chapter 4: Alternate Dispute Resolution
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Q1) The FFEA, a federal agency, was charged with the task of drafting a series of rules to implement the New England Fusion Reactor Initiative. The FFEA anticipates that the new rules will involve drastic changes for all the concerned parties. Rather than simply writing the rules and placing them before the affected parties, what action might the FFEA take to minimize the other parties' dissatisfaction with the rules? Explain.
Q2) ADR is most likely to be useful in cases involving:
A) constitutional law.
B) civil rights.
C) contracts.
D) criminal law.
Q3) The parties involved in the dispute can use early neutral evaluation (ENE) to settle a case or proceed to trial.
A)True
B)False
Q4) During a settlement week, the court:
A) settles those cases that cannot be resolved through arbitration.
B) requires attorneys to be present for mediation sessions.
C) resolves all submitted cases to be decided by summary jury trial.
D) subjects all submitted cases to private civil trials.
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Chapter 5: Criminal Law and Cybercrimes
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Q1) Alvin has discovered how to duplicate subway fare cards, and has made several hundreds of them with the intention of defrauding people. Which of the following crimes has Alvin committed?
A) Larceny by false pretenses
B) Forgery
C) Embezzlement
D) Bribery
Q2) Which of the following would be considered a criminal act?
A) Martin had a heart attack while driving his semitrailer on a highway, causing a head-on collision with another trailer, and resulting in a 40-car pileup and 17 deaths.
B) Last summer, Sam made and sold crack cocaine and marijuana to teenagers in his neighborhood, leading to drug network and addiction amongst teenagers of that locale.
C) Karen, obsessed with thoughts of her husband's affair with his colleague, wrote in her diary detailed plots of how to kill the woman.
D) Helen thinks she cannot get through each day without taking LSD, a psychedelic drug.
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Chapter 6: Tort Law and Cybertorts
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Q1) Contributory negligence is a defense that completely prevents the plaintiff (the injured party) from recovering any damages.
A)True
B)False
Q2) Vienna is a quiet, reclusive, stay-at-home mom. However, last week she became a ____________ after she rescued her neighbor's child from drowning in canal and was interviewed on national television as "America's Mom." As long as her notoriety lasts, she will be held to the ____________ test.
A) temporary public figure; actual malice
B) public figure; slander per se
C) temporary public figure; public disparagement
D) temporary public figure; public privilege
Q3) Oral truth is not a defense to a suit for libel.
A)True
B)False
Q4) Shopkeeper's privilege allows a store owner to detain a shopper without suspicion that an incident has occurred.
A)True
B)False
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Chapter 7: The Essentials of Contract Law
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Q1) Ruben promises to pay Talana $200 if she steals Jessica's business law textbook. Talana steals the business law book, but Ruben, who now feels guilty for his act, refuses to pay Talana and asks her to return the book. Discuss ways in which Reuben has breached the contract.
Q2) Beth and Joan, both 15 years of age, enter into a written contract. In the contract, Beth agrees to do Joan's math homework for two weeks for $50, and Joan agrees to pay Beth at the end of the two-week period. This contract is:
A) implied-in-law.
B) void.
C) unenforceable.
D) voidable.
Q3) Capitalism is a complex, adaptive system of overlapping economic agents that operates on the basis of competition and a free market that responds to the movement of supply and demand.
A)True
B)False
Q4) The quasi-contract concept involves the mutual assent of the parties.
A)True
B)False
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Chapter 8: Offer, Acceptance, and Mutual Assent
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Q1) A "click-on" acceptance is a valid method of accepting an e-contract.
A)True
B)False
Q2) A newspaper advertisement addressed to "Ohio residents only" would be a private offer.
A)True
B)False
Q3) Most of the time, an advertisement is specific enough to constitute an offer.
A)True
B)False
Q4) When dealing face-to-face, an acceptance becomes complete as soon as the offeree freely communicates words of acceptance to the offeror.
A)True
B)False
Q5) In the case of an open offer, there must be serious intent, clear and reasonably definite terms, and communication to the offeree.
A)True
B)False
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Chapter 9: Consideration and Cyber-Payments
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Q1) Ever since industrial capitalism became the primary economic engine of the West, courts no longer looked to see if the things exchanged in a contract were of equal value. A)True
B)False
Q2) There is no legal detriment when a person promises not to sue.
A)True
B)False
Q3) Tim's mother was concerned that Tim would develop cancer if he used tobacco, so she promised Tim $10,000 if he would refrain from any use of tobacco until age 30. Tim did so, but his mother refused to give him the $10,000. Does Tim have a legal right to the $10,000? Explain.
Q4) Jackie borrowed $1,000 from Uncle John in 1975, with repayment due in 1977. Jackie never repays the loan, and Uncle John never attempts to collect it. In 2004, Jackie writes Uncle John a letter stating that she is sorry that she did not repay the debt and encloses a check for $100 toward repayment. Uncle John cashes the check. He dies of a heart attack one week later. Uncle John's heirs find the letter and sue Jackie to collect the remaining $900 balance. Analyze the case.
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11
Chapter 10: Capacity and Legality: The Final Elements
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Q1) When a minor indicates the intention not to live up to a contract, that minor is entitled to a return of everything given to the other party.
A)True
B)False
Q2) Brandon, a recent law school graduate, says he will provide affordable legal services to anyone who needs help. Although his bar exam results are not out yet, Brandon is certain that he has passed. Legally, are his clients required to pay for his legal services before he has received his license?
A) Yes, a court will require that his clients pay in full for any legal services they receive from him.
B) Yes, but if Brandon fails the exam, he must return all consideration to the appropriate clients.
C) No, since it is against the law for anyone without the required state license to offer legal advice.
D) No, because Brandon has acted incompetently.
Q3) Nondisclosure agreements are usually needed to protect trade secrets. A)True B)False
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Chapter 11: Written Contracts and Cyber-Commerce
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Q1) Under contract law, facsimile signatures are always as valid as original signatures.
A)True
B)False
Q2) The person to whom a cosigner makes a promise is the obligee.
A)True
B)False
Q3) The Fair and Accurate Credit Transactions Act:
A) Establishes the same type of legal parity between electronic records and paper records
B) Is a federal act designed to deal with problems associated with cyber-commerce
C) Prohibits merchants from using credit card receipts that show anything other than the last five credit card numbers
D) Is a federal amendment to the Uniform Electronic Transactions Act
Q4) According to the Statute of Frauds, written agreements must always be signed by both parties.
A)True
B)False
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Page 13
Chapter 12: Third Parties, Discharge, and Remedies
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Q1) Claudia contracts with Friendly Paving Co. to install a new driveway. To pay for this work, Claudia transfers to Friendly Paving Co. her right to receive payment from Clifford for a loan she made him. Friendly Paving Co. is now a(n):
A) creditor beneficiary.
B) donee beneficiary.
C) executor.
D) fiduciary.
Q2) Promising to pay when goods are delivered is an example of a condition subsequent.
A)True
B)False
Q3) If due notice has been given and the obligor makes payment to the assignor, the obligor is excused from making payment to the assignee.
A)True
B)False
Q4) Alphonse owes huge debts to many creditors. A month before filing for bankruptcy, he distributes all of his assets to his church. Discuss the case.
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14
Chapter 13: Sales Contracts: Formation, Title, and Risk of Loss
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Sample Questions
Q1) In an auction with reserve, the auctioneer must accept the highest bid.
A)True
B)False
Q2) Buyers obtain an insurable interest even though they might later reject or return the goods to the seller.
A)True
B)False
Q3) Samantha was looking for a certain shade of thread to complete her needlework on a tablecloth. At a local shop, however, she was unable to decide which of the five selected shades would be the closest match to the cloth. The shop owner allows Samantha to take the selected shades home and decide which one she would want to have. This is an example of which of the following?
A) Destination contract
B) Sale on approval
C) Sale on acceptation
D) Approval contract
Q4) Big Choppers orally contracts with Jane to make a custom motorcycle for Jane for $30,000. When completed, Jane refuses to accept the motorcycle or pay for it. Discuss the validity of the oral contract.
Page 15
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Chapter 14: Sales Contracts Rights, Duties, Breach, and Warranties
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Sample Questions
Q1) In a tender of payment, the:
A) buyer offers to turn the money over to the seller.
B) buyer shows a seller his or her legal tender.
C) seller puts conforming goods at the buyer's disposition.
D) seller provides storage facilities for goods to the buyer.
Q2) The statute of limitations for breach of a sales contract is two years.
A)True
B)False
Q3) Gerald orders 1,000 cupcakes from Haddock Bakers for a Christmas Eve party. However, Haddock fails to deliver the cupcakes as per the schedule mentioned in the contract, and does not send any notification to Gerald. Gerald orders the cupcakes from Marlene's Cakes that evening. Gerald's order from Marlene's Cakes is called a
A) writ of replevin
B) specific performance
C) cover of a sales contract
D) cure of nonconforming product
Q4) Generally, the words "as is" on an item for sale exclude implied warranties.
A)True
B)False
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Chapter 15: Product Liability and Consumer Protection
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Q1) To which type of transaction does the negative option rule apply?
A) Subscription to CD or DVD clubs that sends products on a regular basis and require the consumer to opt out of the next shipment
B) Buying used cars
C) Subscription to telephone services
D) Buying goods via telephone or Internet
Q2) An FTC order, under which a company agrees to stop a disputed practice without necessarily admitting that it violated the law, is called a consent order.
A)True
B)False
Q3) Local business activity carried on within state boundaries is known as:
A) public commerce.
B) interstate commerce.
C) intrastate commerce.
D) local commerce.
Q4) The annual percentage rate (APR) is calculated by consumers with tables provided by the Federal Trade Commission.
A)True
B)False
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Chapter 16: The Nature of Negotiable Instruments
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Q1) A negotiable instrument is a written document signed by the maker that contains a conditional promise or order to pay a fixed amount of money on demand or at a definite time to the bearer or to order.
A)True
B)False
Q2) The most common type of draft in use today is the check.
A)True
B)False
Q3) Mark gives a $3,000 check drawn on Access Bank to Acme Industries who mislays the check for three weeks. When Acme finds the check, they request that Access Bank certify the check. Access declines to do so, and Acme tells Mark that the check has been dishonored. Mark contacts Access who agrees to certify the check. Access subsequently wants to withdraw their certification, since Mark has insufficient funds in his account. Discuss the legal issues contained in their situation.
Q4) The words "without recourse" on an indorsement means the indorser is:
A) liable personally, but not other parties.
B) not liable for any problems associated with the instrument.
C) not liable if the instrument is dishonored.
D) liable for only up to fifty per cent of the loss.
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Chapter 17: Holders in Due Course Defenses and Liabilities
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Q1) Carl finds a lost dog and returns it to its owner, Betty. Betty gives Carl a check for $50 for his efforts, but later stops payment on the check. Carl cashed the check at Cash-All-Checks, who now seeks to recover from Betty. Will Cash-All-Checks be successful?
A) Betty has a real defense against Carl and Cash-All-Checks.
B) Betty has no defense against Cash-All-Checks, hence the latter will be successful.
C) Betty has a personal defense that allows Cash-All-Checks to be successful.
D) Betty has a defense against Cash-All-Checks since the check is less than $100.
Q2) When Tina was fifteen years of age, she gave Sam a negotiable note payable five years later. Sam negotiated it to Neighborhood Bank, who became a holder in due course. Tina may assert her age as a defense against Neighborhood Bank to disaffirm the payment.
A)True
B)False
Q3) Notice of dishonor of a check may only be given through a Federal Reserve Bank.
A)True B)False
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Page 19
Chapter 18: Bank-Depositor Relationships and Cyber-Banking
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Q1) When a check is deposited in the payee's own account in a depository bank, any settlement given by the depository bank is final.
A)True
B)False
Q2) A business receiving money by electronic transfer is known as the beneficiary. A)True B)False
Q3) Under the Check 21 Act, bank customers have an absolute right to see their original canceled checks.
A)True
B)False
Q4) Jill's account with Small Bank is improperly charged with a $3,000 substitute check that was actually Bob's check drawn on Small Bank. Discuss Jill's legal rights and what she must do to rectify this situation.
Q5) When the bank collects or attempts to collect checks made payable to the customer, it acts as the customer's agent.
A)True
B)False
20
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Chapter 19: Insurance
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Q1) A(n) ____________ will provide temporary insurance coverage until the policy is formally accepted.
A) premium
B) adhesion contract
C) binder
D) warranty
Q2) Under bodily injury liability automobile insurance, the insurer is liable for damages up to the limit of the insurance purchased.
A)True
B)False
Q3) Property insurance can be made less expensive by the use of a deductible.
A)True
B)False
Q4) During inflationary times, when bank interest rates are high, insurance policies are usually poor sources for loans at low interest rates.
A)True
B)False
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Chapter 20: Mortgages and Security Interests
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Q1) Iko purchased a house through Stockholm Bank Pvt., Ltd. A year later, Iko wanted to make improvements on the mortgaged property and borrowed money from Jeremy, mortgaging the same property again. Jeremy is unaware of the mortgage of the house by Stockholm Bank and records the mortgage. Analyze the situation in case Iko is unable to repay both the mortgagees.
Q2) The Emergency Economic Stabilization Act (ESSA) of 2008 did not have the authority to limit executive compensation and the "golden parachutes" of CEOs of institutions who were granted TARP bailout funds.
A)True
B)False
Q3) Linda puts up her land as collateral for a loan from Small Bank. Linda is a mortgagee. A)True
B)False
Q4) When a borrower does not qualify for a conventional mortgage, he might ask for and receive a subprime loan.
A)True
B)False
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Chapter 21: Bankruptcy and Debt Adjustment
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Q1) In 1978, Chapters 11 and 13 of the Bankruptcy Code were created, which:
A) made it easier for creditors to obtain bankruptcy relief.
B) allowed businesses and individuals to reorganize and keep going.
C) made it more difficult to declare bankruptcy.
D) allowed creditors to keep all of the debtor's assets.
Q2) Fritz is a professional painter and owns a truck worth $10,000 and tools worth $3,000. He owns a very modest house worth $17,000. He has numerous unsecured debts totaling $500,000 and considers filing for bankruptcy. Discuss the bankruptcy alternatives for Fritz.
Q3) Under Chapter 13 of the Bankruptcy Code, what happens if the debtor submits the repayment plan to the court, but the court has yet to hold its hearing?
A) The debtor is not required to start payments within the stipulated period of thirty days.
B) The debtor makes the payments to the trustee.
C) The debtor makes payments individually to the creditors.
D) The debts of the debtor are discharged.
Q4) Trudy has a steady income, but is behind on her payment of debts. Trudy wants to pay her debts, but needs some relief from her creditors. Discuss what type of Bankruptcy Procedure would best fit her case.
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Page 23
Chapter 22: Agency Law
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Q1) Gordon employs Josh as an agent to sell Gordon's house. When does this agency end if the agreement is silent?
A) When the house is sold
B) When Josh locates a possible buyer
C) When Josh decides to look for other employment
D) When Gordon decides to look for another agent
Q2) An employer's vicarious liability for its employee's actions is based on the principle of respondeat superior.
A)True
B)False
Q3) If an agent becomes insane, it automatically terminates the authority of the agent. A)True
B)False
Q4) Brink Hospital employs emergency room physicians who are independent contractors. Brink may be liable for their torts under the doctrine of apparent authority. A)True
B)False
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24
Chapter 23: Employment Law
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Q1) Employees who believe that their employer has violated FMLA rules can file complaints with the:
A) Labor Employment Standards Administration.
B) Equal Employment Opportunity Commission.
C) Department of Labor.
D) Office of Veterans' Employment and Training Service.
Q2) Standard Co. has an employee pension plan under which Jessica has worked for 12 years. Jessica is laid off at age 60, and five years later she "retires" and attempts to draw her pension benefits. However, she is informed that she is not eligible for pension benefits because she had not been working under the Standard Co. plan at the time of her retirement. Is this correct?
A) Yes, if that is what the Standard Co. plan specifies.
B) No, since Jessica worked longer than 10 years for Standard Co.
C) No, since Jessica's benefits are vested.
D) Yes, since Standard Co. only has a responsibility to current employees.
Q3) The foreman of Small Co. can require a search warrant if OSHA inspectors want to enter Small's factory for a random inspection.
A)True
B)False
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Page 25
Chapter 24: Labor Law
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Q1) An employer is barred from playing any role in the selection of union representatives.
A)True
B)False
Q2) A "hot-cargo" contract allows a union to handle stolen property that has been recovered by the police and sold at a police auction.
A)True
B)False
Q3) Jo testifies before the NRLB about the unfair labor practices of Large Co. Large Co. transfers Jo from its plant in Cleveland, Ohio to its plant in Fairbanks, Alaska against her wishes. Discuss the legal aspects of this situation.
Q4) AML Union tells Standard Co. during contract negotiations that "unfortunate events may occur" if Standard does not agree to most of the union contract proposals. The next day, two Standard Co. trucks burn. AML Union has:
A) not bargained in good faith.
B) made a statement of opinion.
C) exercised its First Amendment rights.
D) engaged in destructive bargaining.
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Chapter 25: Sole Proprietorships and Partnerships
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Q1) In a limited partnership, general partners:
A) take an active part in management, but have unlimited liability for the firm's debts.
B) take an active part in management, but have no liability for the firm's debts.
C) take an active part in management, but are nonparticipating investors.
D) take no part in management, but contribute cash or property.
Q2) In the Opening Case, PNC Bank vs. Michael Farinacci, the main issue was whether the defendants be held jointly liable under the old law (UPA) or jointly and severally liable under the new law (RUPA).
A)True
B)False
Q3) RUPA considers a partnership to be an entity in relation to liability.
A)True
B)False
Q4) In a sole proprietorship, the owner may keep all the profits.
A)True
B)False
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27
Chapter 26: The Corporate Entity
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Q1) In terms of the steps in the incorporation process, which of the following occurs after the charter is issued?
A) A statutory agent is appointed.
B) The organizational meeting is held.
C) Filing fees are paid.
D) Promoters do preliminary work.
Q2) An LLC operating agreement is required by law in all states.
A)True
B)False
Q3) Jon, a promoter, is concerned about being personally liable on preincorporation contracts he signs on behalf of corporations that have not yet been formed. Discuss what Jon may lawfully do to avoid this liability.
Q4) Jan signs the articles of incorporation for a corporation being formed, and Tom wants to locate possible investors in the new corporation. Jan is a(n):
A) incorporator.
B) promoter.
C) registered agent.
D) shareholder.
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28
Chapter 27: Corporate Governance
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Q1) Chris, Miller, and Kacy created a limited liability company by filing the articles of organization, appointing a statutory agent, and paying the appropriate filing fee. They also agreed to run the LLC themselves, making it a member-managed LLC. Chris entered an agreement whereby he purchased 1,000 barrels of oil. Neither Miller nor Kacy believe that Chris paid a good price for the oil. Nevertheless, Chris argues that the LLC is bound by the contract he entered. Is Chris correct? Explain.
Q2) The manager of a manager-run LLC is protected by the business judgment rule, but not the fairness rule.
A)True
B)False
Q3) Pogisa is a director at Trendz Corp. After studying and consulting with experts, Pogisa votes to have Trendz sell a tract of land for $500 per acre. Within a year, the land is worth $2,000 per acre, and Trendz shareholders want to sue Pogisa for her vote to sell the land. Under the ____________, Pogisa may be entitled to legal protection.
A) Fairness Rule
B) Business Judgment Rule
C) Insider Trading Rule
D) Actual Authority Rule
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Chapter 28: Government Regulation of Corporate Business
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Q1) Small Co. is afraid that it will become the subject of a takeover bid and lose its independent existence. Can Small Co. take the help of a friendly suitor to offset any takeover bid? If so, how?
Q2) ABC Co. makes a tender offer to acquire 3% of the stock of XYZ Co. This is considered a stock acquisition, and ABC must file with the SEC.
A)True
B)False
Q3) In a(n) ____________, the buyer purchases enough shares in a corporation to gain voting control of that corporation.
A) asset acquisition
B) stock acquisition
C) consolidation
D) joint venture
Q4) Big Corp. advertises that "nine out of ten physicians prefer our products" when in fact the marketing research, done by Independent Research Co., was flawed. Big Corp. may be charged with false advertising, even if it believes the statement was true.
A)True
B)False
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Chapter 29: Personal Property and Bailments
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Q1) Viva ships livestock via Cattle Truck Co. to an out of state feed lot. The cattle are held at the state line for a week, while the state's agricultural department determines that the livestock is not diseased. Can Viva require Cattle Truck to pay for the extra expense and lost profits if Cattle did not inform Viva of this possible delay when it accepted the shipment?
Q2) Vanessa has received gifts subject to the provisions of the Uniform Transfer to Minors Act. When Vanessa graduates from high school at age 17 and moves away from home, she wants to terminate the custodianship. At what age does the custodianship terminate?
A) 17
B) 18
C) 21
D) The age is decided on case-by-case basis.
Q3) Anna finds a ring on the sink ledge of a restroom for use by customers of Red Barn Restaurant. Discuss who has legal custody of the ring.
Q4) In a bailment, the person who transfers the property is called the bailee.
A)True
B)False
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Chapter 30: Real Property and Landlord and Tenant Law
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Q1) Melinda digs a hole next to Susan's building and Susan's building foundation cracks. Generally, Melinda would not be liable for damages.
A)True
B)False
Q2) A deed becomes effective when:
A) it is recorded in the public records.
B) the signatures are acknowledged.
C) it is delivered to the grantee.
D) it is prepared and signed by the grantor.
Q3) Tom dies, and in his will, he names Pinson as the personal representative of his estate. Pinson decides to sell Tom's house to Sally. Pinson could transfer title to Sally by means of:
A) the probate court records.
B) the decree of the probate court judge.
C) the sworn statement of Pinson.
D) a license issued by the court.
Q4) A barber's chair bolted to the floor of a rented building becomes real property.
A)True
B)False
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Chapter 31: Wills, Trusts, and Advanced Directives
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Q1) Forty year-old Kelsey, a homeowner with a wife and two children, made out his will the day he was institutionalized for alcohol abuse. When he drew up the will, Kelsey was experiencing severe withdrawal symptoms, including impaired memory, insomnia, and tremors. Describe how a court would evaluate whether Kelsey was of sound mind when he made out his will.
Q2) Carolyn signs a handwritten will without witnesses. Such a will is called a holographic will.
A)True
B)False
Q3) In most states, a child who can prove that she was mistakenly (rather than intentionally) left out of her parent's will receive the same share that she would have received had her parents died without a will.
A)True
B)False
Q4) The Opening Case, Windsor v. United States, involved the constitutionality of the Defense of Marriage Act (DOMA).
A)True
B)False
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Page 33
Chapter 32: Professional Liability
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Q1) A(n) ____________ opinion is a qualified opinion by an auditor that indicates that the financial statements are an accurate reflection of the company's financial health apart from some minor deviation from GAAP, not serious enough to warrant an adverse opinion.
A) "except for"
B) "unless"
C) "but for"
D) "indeterminate"
Q2) Certified public accountants (CPAs) and non-CPA partners are not under the authority of the Consumer Financial Protection Bureau as long as they are performing routine and traditional tasks.
A)True
B)False
Q3) The architectural firm of Maxwell-Wyatt, Inc. designed a house for Sandoval. Due to an error in the architect's plans, the drain in the basement did not work properly. Can Sandoval rightfully expect the firm to pay him the $1,500 it would cost to correct the error? Explain.
Q4) Sally is angry with George, her attorney, and wants to sue him for malpractice. Discuss what Sally must prove to win her case.
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Chapter 33: The Intersection of Law and Science
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Q1) In the "obvious-to-try" standard, if a challenger can show that anyone of ordinary skill can show the obviousness of the innovation, the invention would not be patentable.
A)True
B)False
Q2) Joan Kilney had a major car accident. She continued to be fed through a surgically-implanted gastrostomy tube for a period of five years. She expressed a wish to end the prolonged agony by taking recourse to the right to die. What difficulties are generally faced by a trial court in such cases and what could be the remedy as has envisaged by several commentators?
Q3) A copyright protects the idea itself rather than the expression of an idea. A)True
B)False
Q4) Hercules Steel Castings Company, Inc. manufactures steel castings. It does not follow the permissible limits with regard to the release of polluting gases in the air. It has also failed to report violations of pollutions control laws to the federal government. Which act does it violate and which agency would have the power to prosecute this organization?
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Chapter 34: International Law
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Q1) The Geneva Conventions deal with:
A) prisoners of war only.
B) occupation forces only.
C) both occupation forces and prisoners of war.
D) neither prisoners of war nor occupation forces.
Q2) Membership in the EU is enough to allow a nation to adopt the euro.
A)True
B)False
Q3) The earliest development of the preemptive war concept was by:
A) Leslie Groves.
B) Curtis LeMay.
C) Thomas More.
D) Socrates.
Q4) Corzina, a small nation-state, has been attacked by its neighbor, Troy. Another nation-state, Rutland is a friend of Corzina's, but has problems with Troy. Finding this to be the best opportunity, Rutland attacks Troy, defeats Troy, and takes control over its government and the civilian population. Is the cause and intention of Rutland just?
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