Business Law for Accountants
Exam Answer Key
Course Introduction
Business Law for Accountants provides an essential overview of the legal concepts and regulations that underpin the practice of accounting. This course explores the foundations of contract law, agency, business organizations, securities regulation, bankruptcy, and ethics as they relate to accounting professionals. Students examine case studies to understand legal responsibilities, professional liability, and the impact of business law on financial decision-making. Through practical examples, the course equips future accountants with the knowledge needed to navigate legal challenges, comply with relevant legislation, and uphold ethical standards in their careers.
Recommended Textbook
Business Law Text and Cases Commercial Law for Accountants 14th Edition by Roger LeRoy Miller
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Chapter 1: Business Ethics
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Q1) Effective corporate ethical policies must be clearly communicated to employees.
A)True
B)False
Answer: True
Q2) GetTogether, A Social Media Company encourages its managers to behave ethically, reasoning that lower-level employees will take their cues from management. One of the most important ways to create and maintain an ethical workplace is for GetTogether's management to
A) demonstrate a commitment to ethical decision making.
B) discreetly engage in unethical or illegal acts.
C) look the other way when an employee engages in an unethical act.
D) direct employees to "do as we say, not as we do."
Answer: A
Q3) Codes of ethical conduct can indicate how employees are expected to act.
A)True
B)False
Answer: True
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Chapter 2: Small Businesses and Franchises
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Q1) A franchisor's decision to terminate a franchise is always considered wrongful.
A)True
B)False
Answer: False
Q2) Mai-Lin's Martial Arts, Inc., grants a franchise to Naomi to operate a Mai-Lin's school. Mai-Lin's may require Naomi to pay the franchisor a percentage of her
A) annual sales or volume of business.
B) weekly payroll expense.
C) monthly overhead savings.
D) income from unrelated business activities.
Answer: A
Q3) To protect franchisees against arbitrary or bad faith termination, a state law may require certain procedures be followed in terminating a franchise.
A)True
B)False
Answer: True
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Chapter 3: All Forms of Partnerships
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Q1) A limited liability partnership must be formed in compliance with state statutes.
A)True
B)False
Answer: True
Q2) A partner may pursue his or her own interests without automatically violating the partner's fiduciary duties to the partnership and the other partners.
A)True
B)False
Answer: True
Q3) Chet is a partner in Diligent Accounting Service. Chet can inspect Diligent's books and records
A) in their entirety.
B) only as the firm's management permits.
C) only for a reasonable purpose.
D) only in relation to Chet's capital contribution.
Answer: A
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Page 5
Chapter 4: Limited Liability Companies and Special
Business
Forms
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Q1) Floyd and other consumers form Grocers Mart Cooperative. This form of business organization makes it possible for these consumers to A) avoid personal liability for the acts of the cooperative.
B) obtain an exemption from state laws governing corporations.
C) pay no taxes on their business income.
D) pool their resources to gain an advantage in the marketplace.
Q2) As the beneficiary of a business trust, Bob's liability for trust debts and obligations is A) limited to his capital investment in the trust.
B) limited to his personal assets.
C) nothing.
D) unlimited.
Q3) A limited liability company can be taxed as a corporation.
A)True B)False
Q4) In many states, an operating agreement is required for a limited liability company to exist.
A)True
B)False
Page 6
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Chapter 5: Corporate Formation and Financing
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Q1) The abbreviation "P.A." in the name "Conrad & Drake, Accountants, P.A." means that this organization is
A) a private association.
B) a professional association.
C) a public association.
D) a publicly administered corporation.
Q2) A court will not pierce the corporate veil of a corporation simply because it is too thinly capitalized.
A)True
B)False
Q3) In certain instances of fraud, a court may "pierce the corporate veil" to hold the shareholders individually liable.
A)True
B)False
Q4) Venture capital is capital provided to new business ventures by professional, outside investors.
A)True
B)False
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Page 7
Chapter 6: Corporate Directors, Officers, and Shareholders
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Q1) Directors are expected to conduct a reasonable investigation of a situation before making a decision.
A)True
B)False
Q2) Any individual director can act as an agent to bind the corporation.
A)True
B)False
Q3) A vacancy on the board of directors can be filled by the board itself.
A)True
B)False
Q4) Daryl, Elsa, and Ferris are the directors of Go Apps, Inc. Go also has four officers and fourteen shareholders. Dividends can be ordered by the firm's A) board.
B) minority shareholders.
C) officers.
D) majority shareholders.
Q5) Directors must engage in self-dealing. A)True
B)False
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Chapter 7: Securities Law and Corporate Governance
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Q1) Most private, midsize-business, noninvestment company offers of securities are exempt from the registration requirements.
A)True
B)False
Q2) Only the Securities and Exchange Commission can sue violators of Section 10(b) and Rule 10b-5.
A)True
B)False
Q3) Refer to Fact Pattern 7-2. If Ben is liable under the Securities Exchange Act of 1934, it will be because the information on which he based his purchase of AirLift stock was A) a forward-looking forecast.
B) not material.
C) not yet public.
D) not yet true.
Q4) Anyone who wrongfully obtains inside information and trades on it for his or her personal gain can be liable under SEC Rule 10b-5.
A)True
B)False
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Chapter 8: Tort Law
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Q1) Fifi, a clerk at a Games n' Gamers store, takes a video game player and a selection of new games from the store without permission. Fifi is liable for
A) appropriation.
B) no tort.
C) conversion.
D) wrongful interference with a business relationship.
Q2) Unintentionally causing a party to break a contract may constitute wrongful interference with a contractual relationship.
A)True
B)False
Q3) Felix tells Genie, a prospective tenant, that the roof of the Hillside Apartments building does not leak when Felix knows that it does. This may give rise to an action for fraud, because the statement is one of
A) puffery.
B) fact.
C) illusion.
D) opinion.
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Chapter 9: Agency Formation and Duties
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Q1) Desmond agrees to act as Evie's agent in settlement negotiations with Fawlty Investment Company. Desmond works out a profitable compromise for Evie, but deposits the company's payment in his own account and refuses to give it to Evie. She files a suit against Desmond. What remedies might the court impose?
Q2) John contracts with Kelly to buy a certain number of cattle for Kelly's Circle K ranch. John makes a deal with Lawson, the owner of a local herd, and makes a down payment. Kelly fails to pay the rest of the price. Lawson sues John for breach of contract. John's right to hold Kelly liable for any damages that he has to pay is the right of A) compensation.
B) cooperation.
C) indemnification.
D) reimbursement.
Q3) Employment laws apply to the employer-independent contractor relationship. A)True
B)False
Q4) A principal owes an agent a duty of estoppel.
A)True
B)False
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Chapter 10: Agency Liability and Termination
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Q1) If a principal is undisclosed, the agent may be liable to the principal for a third party's nonperformance of a contract.
A)True
B)False
Q2) Implied authority is authority declared in clear, direct, definite terms.
A)True
B)False
Q3) Vicarious liability is indirect liability.
A)True
B)False
Q4) Darla serves in a representative capacity for Ellen. To accomplish the objectives of this relationship, Darla's authority can be implied
A) by contradiction.
B) by custom.
C) by any subjective measure.
D) under no circumstances.
Q5) An agent's implied authority cannot be implied by custom.
A)True
B)False
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Chapter 11: Employment, Immigration, and Labor Law
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Q1) Hunter is seventeen years old. Under the Fair Labor Standards Act, Hunter cannot work
A) in the entertainment industry.
B) in a hazardous occupation.
C) for her parents.
D) in the agriculture industry.
Q2) Employers that have fifty or more employees must provide certain employees with up to twelve weeks of paid family or medical leave during any twelve-month period.
A)True
B)False
Q3) Workhorse Air Crane Corporation employs aircraft mechanics, computer programmers, outside salespersons, and professionals, including pilots. Employees exempt from the Fair Labor Standards Act's overtime provisions include all of the following except
A) aircraft mechanics.
B) computer programmers.
C) outside salespersons.
D) professionals.
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Chapter 12: Employment Discrimination
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Q1) Employers can legitimately refuse to accommodate the needs of persons with disabilities that substantially limit their everyday activities.
A)True
B)False
Q2) Veronica is a repairperson for Wind Power Company. The job requires traveling to remote areas to make repairs to windmills, transmission towers, and power stations under any conditions. Veronica has had the job longer than other employees. Veronica applies for a promotion to a supervisory position that requires constant communication with others in the field. Wind Power rejects the application on the ground that Veronica is hearing impaired. Wind Power acknowledges that Veronica is otherwise qualified, but asserts that it "needs someone who does not have a hearing problem." Veronica files a suit against Wind Power under the Americans with Disabilities Act of 1990. What is the issue, and what are the relevant considerations on which its resolution depends?
Q3) Employers can require employees to participate in such religious activity as weekly prayer meetings.
A)True
B)False
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Chapter 13: The Formation of Sales and Lease Contracts
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Q1) Generally, acceptance of an offer to lease goods may be made in any reasonable manner and by any reasonable means.
A)True
B)False
Q2) Rally Corporation enters into a contract to sell ski gear to Sno-Sports Inc., which sells a pair of the skis to Tyra, a consumer, who later sells them to Upton, another consumer.
Article 2 of the UCC applies to the sales transactions between A) all of the buyers and sellers.
B) Rally and Sno-Sports only.
C) Sno-Sports and Tyra only.
D) Tyra and Upton only.
Q3) To be characterized as a "good" under the UCC, an item of property must be movable.
A)True
B)False
Q4) Under the UCC, an oral contract for a sale of goods is enforceable if goods have been received and accepted.
A)True
B)False
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Chapter 14: Performance and Breach of Sales and Lease Contracts
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Q1) Field Farms and Gourmet Restaurant enter into a contract for a sale of produce. After Field Farms ships the lettuce but before the restaurant receives it, the buyer declares bankruptcy. The seller can stop delivery of the goods in transit
A) only if the quantity is at least 50 percent of the contract amount.
B) only if the quantity is in a single "unit."
C) only if the quantity is at least a truckload.
D) regardless of the quantity.
Q2) Soft Chair Company contracts to deliver 100 chairs to Stuffy Furnishings Store on May 1 for which Stuffy agrees to pay. Soft tells Stuffy on April 15 that delivery will be delayed until June 1. Stuffy may
A) await performance, sue Soft, or suspend its own performance.
B) only await Soft's performance for a commercially reasonable time.
C) only sue Soft for breach of contract.
D) only suspend its own performance.
Q3) The principle of good faith applies to both parties to a sales contract.
A)True
B)False
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Chapter 15: Negotiable Instruments
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Q1) To be negotiable, an instrument must be payable in a certain amount.
A)True
B)False
Q2) On a sheet of paper, Elle writes, without her signature, "I acknowledge that I owe Frank $600, payable out of the proceeds of the sale of my car, a 1995 Honda Civic, which I promise to advertise 'For Sale' next week. Payment is to be made on or before six months from today." What type of instrument is this? Is it negotiable? If not, why not?
Q3) For an instrument to be negotiable, it must be in writing.
A)True
B)False
Q4) To be negotiable, an instrument must be payable on demand.
A)True
B)False
Q5) Laura writes on a piece of paper, "I owe you $400," signs it, and gives it to Max. This instrument is
A) negotiable.
B) not negotiable, because it does not include an express promise to pay.
C) not negotiable, because it does not recite any consideration.
D) not negotiable, because it does not state any conditions to payment.
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Chapter 16: Transferability and Holder in Due Course
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Q1) Estes receives a check from Fleet Trucking Corporation. On the back of the check, Estes writes "pay to Garden Valley Bank only" and signs his name. This is
A) a blank indorsement.
B) a qualified indorsement.
C) a restrictive indorsement.
D) a special indorsement.
Q2) It is possible for a person who does not qualify as an HDC to acquire the rights and privileges of an HDC.
A)True
B)False
Q3) Emily writes and signs a check payable to "Five Star Cinema." George, Five Star's manager, indorses the check "For deposit only." This is
A) a blank indorsement.
B) a qualified indorsement.
C) a restrictive indorsement.
D) a special indorsement.
Q4) Under the UCC, a transfer of rights under a contract is a negotiation.
A)True
B)False
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Chapter 17: Liability, Defenses, and Discharge
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Q1) Owen is a holder of a note obtained from Purchase Money, Inc. Regarding the defenses against payment of the note to which Purchase Money is subject, Owen, as an ordinary holder, is subject to A) more defenses.
B) no defenses.
C) some defenses, but not as many.
D) the same defenses.
Q2) To properly present a draft for payment, a holder must present it to the drawer. A)True
B)False
Q3) An indorser is secondarily liable on an instrument. A)True
B)False
Q4) Flo is an administrative assistant with Global Dispatch & Shipping Corporation, but has no authority to sign Global Dispatch checks. Flo orders merchandise from Home & Office Furnishings Company delivered to her home and pays with a Global Dispatch check, signing "Global Dispatch & Shipping Corp. by Flo, admin. assist." Home & Office does not know that Flo has no authority to sign the check. Who is liable on the check, and why?
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Chapter 18: Banking in the Digital Age
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Q1) E-money replaces physical cash with virtual cash.
A)True
B)False
Q2) A bank is not obligated to pay an uncertified check presented less than six months from its date.
A)True
B)False
Q3) Faye forges Greta's signature on a check "payable to the order of Faye" drawn on Greta's account in Hearthside Bank. Most likely, if the bank pays the check
A) the Federal Reserve will reimburse all parties for their costs.
B) the loss will be apportioned among all of the bank's customers.
C) Greta will be liable for the amount.
D) the bank will have to recredit Greta's account.
Q4) Marta has a checking account with Neighbors Bank. Marta signs a check "payable to Olive" drawn on Marta's account. Neighbors Bank is
A) none of the choices.
B) the drawee.
C) the drawer.
D) the payee.
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Chapter 19: Creditors Rights and Remedies
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Q1) Edgar refuses to pay Delia $500 for the cost to repair Edgar's washing machine and dryer, which Delia still possesses. Delia has a lien on the machines, which will terminate
A) if she continues to maintain possession.
B) if she does not file a written notice of lien within thirty days.
C) if she voluntarily surrenders possession.
D) at the end of the machines' warranty period.
Q2) Loni delivers her Mazda to be repaired at Nile's Body Shop. Loni agrees to pay cash. Nile performs, but Loni does not pay. Nile tells Loni that he will keep the car until she pays. This is
A) a judicial lien.
B) a mechanic's lien.
C) an artisan's lien.
D) a violation of most states' laws.
Q3) A debtor's vehicle is never exempt from satisfaction of a judgment debt.
A)True B)False
Q4) A default occurs when a debtor fails to pay a creditor as promised.
A)True B)False
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Chapter 20: Secured Transactions
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Q1) Whatever a secured party obtains on a sale of collateral is all that he or she can collect on the debt.
A)True
B)False
Q2) The payment of Brian's debt to Chuck is guaranteed by Brian's personal property. This is
A) an attachment.
B) a secured transaction.
C) perfection.
D) a violation of most state laws.
Q3) Fiscal Credit Corporation asks Global Industries, Inc., to agree to a security agreement that provides for coverage of the proceeds from the sale of after-acquired property. This is
A) the first-in, first-out rule.
B) a floating lien.
C) a violation of most state laws.
D) a future advance.
Q4) To create an enforceable security interest, the secured party must give value. A)True
B)False
Page 22
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Chapter 21: Bankruptcy Law
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Q1) Builders Construction files a voluntary petition for bankruptcy. In listing its assets, Builders intentionally omits certain assets, including plots of undeveloped real estate. After Builders is granted a discharge, Commercial Electric, one of Builders' unsecured creditors whose claims were discharged, learns of the fraud. Commercial Electric can A) do nothing.
B) enforce its claim against Builders.
C) file an involuntary petition for bankruptcy against Builders.
D) take possession of the stones with or without a breach of the peace.
Q2) A trustee has the power to avoid preferences.
A)True
B)False
Q3) A debtor must be insolvent to file for bankruptcy relief.
A)True B)False
Q4) Bankruptcy proceedings are held in state courts. A)True B)False
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Chapter 22: Professional Liability and Accountability
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Q1) Randi, an accountant, includes a false statement in a report for Social Media Marketing, Inc., that is filed with the Securities and Exchange Commission. When Theo buys stock in Social Media and loses money on the investment, he files a suit against Randi, alleging fraud under the 1934 Securities Exchange Act. To avoid liability, Randi can show that she
A) intended to defraud Social Media, not Theo.
B) intended to profit on stock trades generally, not only Theo's.
C) is an otherwise competent accountant.
D) had no knowledge that her statement was false.
Q2) An accountant is liable for an omission in a registration statement to a purchaser of securities whether or not the omission has a causal connection to the purchaser's loss.
A)True
B)False
Q3) Professionals are governed by the contracts they enter into with their clients.
A)True
B)False
Q4) The competency of professionals' service is never an issue.
A)True
B)False
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Chapter 23: Administrative Agencies
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Q1) A subpoena ad testificandum is an order to an individual or organization to hand over certain records, papers, or books.
A)True
B)False
Q2) The president of the United States may not veto congressional attempts to modify an agency's authority.
A)True
B)False
Q3) Once an agency has been created, it cannot be abolished.
A)True
B)False
Q4) Executive control over the Federal Communications Commission, and other agencies, may be exercised through the president's power to A) appoint agency officers.
B) veto the agency's final rules.
C) veto the agency's final orders.
D) promulgate enabling legislation.
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Chapter 24: Consumer Law
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Q1) One of the most important federal consumer protection laws is directed at deceptive trade practices.
A)True
B)False
Q2) Imported foods do not have to meet U.S. safety standards.
A)True
B)False
Q3) A credit collection agency may contact a debtor at any time.
A)True
B)False
Q4) Credit can be denied if a person receives a certain form of income.
A)True
B)False
Q5) Credit Loan Company extends credit in the ordinary course of its business. Under the Truth-in-Lending Act, The lender must inform potential borrowers of A) credit terms offered by other lenders.
B) comparative prices for goods to be bought with the borrowed funds.
C) Credit Loan's credit terms.
D) the borrowers' credit scores.
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Chapter 25: Environmental Protection
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Q1) Smelting, Inc., operates a plant-a "major source"-that emits hazardous air pollutants for which the Environmental Protection Agency has set maximum levels of emission. The plant does not use equipment to reduce its emissions. Under the Clean Air Act, this is most likely
A) a violation.
B) not a violation because a "major source" is exempt.
C) not a violation because the plant does not use any equipment.
D) not a violation because the plant is not a mobile source.
Q2) Fried Food, Inc., operates a commercial frying plant, discharging pollutants into the air. Greg reports the violations to the Environmental Protection Agency. Greg A) is not entitled to a payment.
B) may be paid up to any amount.
C) may be paid up to $1,000.
D) may be paid up to $10,000.
Q3) Liability does not extend to businesses that merge with or buy corporations that have violated CERCLA.
A)True
B)False
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Chapter 26: Antitrust Law
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Q1) Unilateral conduct can result in a violation of antitrust law.
A)True
B)False
Q2) To drive its competitors out of a certain geographic segment of its market, Drones, Inc., sets the prices of its products below cost for the buyers in that area. This is
A) price-fixing.
B) smart marketing.
C) predatory pricing.
D) price discrimination.
Q3) Predatory pricing involves selling a product at prices substantially above the fair market value.
A)True
B)False
Q4) Price discrimination occurs when a seller charges different prices to competing buyers for identical goods or services.
A)True
B)False
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Chapter 27: Personal Property and Bailments
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Q1) Accession occurs when someone adds value to an item of personal property by the use of labor or materials.
A)True
B)False
Q2) Refer to Fact Pattern 27-1.Truck & Transfer can avoid liability
A) by proof that Truck & Transfer was not negligent.
B) by proof that Truck & Transfer's loading dock is in a high-crime area.
C) by proof that United Home was negligent in hiring TTC.
D) under any circumstances.
Q3) A gift causa mortis does not become absolute until the donor dies from the contemplated illness or other peril.
A)True
B)False
Q4) To be effective, a gift causa mortis must meet only two requirements: intent and acceptance.
A)True
B)False
Q5) Businesses often pay taxes on the personal property they own, use, or lease.
A)True
B)False
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Chapter 28: Real Property and Landlord-Tenant Law
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Q1) Grace has a fixed-term tenancy for her apartment with Hillview Apartments. Grace dies. Her tenancy
A) passes to her heirs as real property.
B) passes to her heirs as personal property.
C) is terminated.
D) becomes a tenancy at will.
Q2) To widen a highway, the state of Ohio obtains, through a judicial proceeding, title to the individual lots in a residential neighborhood. A subsequent proceeding will determine A) the fair value of the property.
B) how soon the former owners should vacate their property.
C) how wide the highway should be.
D) whether the planned highway would violate any zoning laws.
Q3) Ann rents an apartment from Best Home Properties. The apartment is destroyed in a fire that is not the fault of either party. For the rest of the lease term, Ann A) is entitled to payment of the amount of the rent from the landlord.
B) is no longer obligated to pay any of the rent.
C) must continue to pay the rent, in a reduced amount.
D) must continue to pay the rent, in the full amount.
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Chapter 29: Intellectual Property
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Q1) The TRIPS agreement covers computer programs.
A)True
B)False
Q2) A personal name is not protected under trademark law if it acquires a secondary meaning.
A)True
B)False
Q3) States do not have trademark statutes.
A)True
B)False
Q4) Mary Kate Inc. allows Ashley Company to use Mary Kate's trademark as part of Ashley's domain name. This is
A) a license.
B) a likelihood of consumer confusion.
C) cybersquatting.
D) trademark dilution.
Q5) Copyright protection is automatic-registration is not required.
A)True
B)False
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Chapter 30: Insurance
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Sample Questions
Q1) A business organization cannot obtain insurance on the life of a person, even on the life of an individual who is important to that organization.
A)True
B)False
Q2) Orin is a doctor with Physicians Health Clinic, which obtains insurance from Quotient Insurance, Inc., on Orin's life. Orin dies. The proceeds of the policy belong to A) Orin's heirs.
B) Physicians Health Clinic.
C) Quotient Insurance.
D) none of the choices.
Q3) An insurer has a duty to avoid paying a claim even if it means acting in bad faith.
A)True
B)False
Q4) An arbitration clause requires arbitration of disputes that arise between the insurer and the insured concerning the settlement of claims.
A)True
B)False
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Page 32
Chapter 31: Wills and Trusts
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Q1) A will must normally be attested to by two or three witnesses.
A)True
B)False
Q2) Meryl's daughter Nixie dies before Meryl, leaving Nixie's son Orman. On Meryl's death, it is learned that her will gives "to my daughter Nixie my farm near Pratt, Kansas." Most likely, the gift of the farm will lapse in part.
A) abate.
B) not lapse.
C) lapse in full.
D) lapse in part.
Q3) Ralph creates a trust by his will for the benefit of Stella and her family to come into existence on Ralph's death. This is
A) a constructive trust.
B) a living trust.
C) a resulting trust.
D) a testamentary trust.
Q4) A living trust is created by a grantor during his or her lifetime.
A)True
B)False
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Chapter 32: Digital Update:should Employees Have a Right of Disconnecting
16
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Sample Questions
Q1) Outlier Inc. hosts client accounts in servers located in foreign countries. The U.S. government issues a warrant to obtain e-mails related to a drug case from one of those accounts. Outlier refuses to comply. On the government's appeal, it is most likely that a court will
A) order the owner of the account to "stand and deliver."
B) order Outlier to comply with the warrant.
C) order the government to abide by Outlier's refusal.
D) order the foreign countries to seize Outlier's servers.
Q2) Predictive analytics in the digital realm focuses on
A) predicting certain behavior based on certain data.
B) analyzing certain data to predict digital developments.
C) analyzing certain predictions to monitor certain results.
D) predicting certain digital data based on reasoned analysis.
Q3) Personnel Resources Company considers using software to analyze employee behavior with the goal of predicting wrongdoing. In this situation, the ethical focus is on A) the success of the software.
B) sanctions for something yet to be done.
C) questions of privacy.
D) whether data mining should occur only online.
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Chapter 33: Digital Update: Revenge Porn and Invasion of Privacy
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Q1) Rob, a taxi driver for Swift Cab Company, and other cabdrivers file a suit in a Texas state court against Uber, alleging unfair competition. If the result in this suit is like the result in similar suits, the court will most likely rule in favor of
A) Rob.
B) Swift Cab.
C) the state of Texas.
D) Uber.
Q2) Under the Patient Protection and Affordable Care Act, small businesses that meet certain requirements-including those with fewer than twenty-five full-time employees-can
A) any of the choices.
B) buy health insurance for employees through the Small Business Health Options Program.
C) claim a health-care tax credit.
D) claim a business-expense tax deduction.
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Chapter 34: Digital Update: Taxing Web Purchases
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Q1) Maria borrows funds through the U.S. Department of Education (DOE) to pay for her education. She defaults on the loan. In some states
A) any of the choices.
B) a lien can be placed on the debtor's real property to pay the debt.
C) the debt can be collected by garnishment of the debtor's bank account.
D) the debtor's professional license can be revoked.
Q2) Beth borrows $10,000 from the U.S. Department of Education to help pay for her education at Community College. She signs a note payable to DOE for the amount of the loan plus interest. The borrower will be considered in default if she fails to
A) any of the choices.
B) repay the loan according to the terms in the note.
C) graduate from Community College within four years of the loan.
D) find employment in her program of study after graduation.
Q3) A digital invoice is
A) an electronic version of a paper bill that can be paid online.
B) an online view of a paper bill that cannot be paid online.
C) a statement for a subscription service that makes B2B payments.
D) a supplemental record of a transaction payment.
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Chapter
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Sample Questions
Q1) Advertising generally is required to be accompanied by certain disclosures. According to Federal Trade Commission guidelines, disclosures accompanying native ads should
A) not be where consumers will notice them.
B) not be above or before the native ad.
C) not be as close as possible to where consumers look first.
D) stand out.
Q2) The European Union has charged Google Inc. with an antitrust violation-promoting its comparison-shopping service at the expense of its competitors. Google's best defense against this charge is that
A) "Google" has become a verb synonymous with conducting a search.
B) search engines have proliferated on the Web.
C) Google is abusing its dominant position.
D) Google prominently displays its service in its general search results.
Q3) To reduce the emission of greenhouse gases, power companies are required to save specified amounts of energy by
A) all of the states.
B) less than half of the states.
C) more than half of the states.
D) none of the states.
Page 37
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Chapter 36: Digital Update:the Exploding World of Digital Property
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Sample Questions
Q1) Liz starts Modern Roofing, which becomes successful through her efforts. Meanwhile, she marries Nick. To ensure that her business will not break up if her marriage falls apart, Liz should
A) avoid involving Nick in the business.
B) employ Nick in the business in a minor capacity.
C) appoint Nick to be the business's chief executive officer.
D) hire Nick to work for the business on a per-project basis
Q2) Money2Play Corporation does not make or sell products or services but buys a patent and asserts it against New Functions, Inc., a start-up applications company, demanding licensing fees and threatening an infringement suit. Because of these threats, New Functions is most likely to
A) have difficulty in attracting investors.
B) target other firms with patent litigation to obtain investment capital.
C) cease and desist.
D) collect more capital to fund its operations than without the threats.
Q3) According to the United States Supreme Court,
A) Metro City can take a parking lot for a privately owned sports stadium.
B) all of the choices.
C) Laborville can condemn a vacant field for a private manufacturing plant.
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D) Sleepyton can take residential property for a private corporate complex.
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