Business Law
Practice Exam
Course Introduction
Business Law provides students with a comprehensive understanding of the legal principles and regulations that govern commercial activities and organizations. The course covers topics such as contract law, agency, employment law, business organizations, property law, and legal aspects of business transactions. Emphasis is placed on the role of law in business decision-making, dispute resolution, and ethical considerations. Through case studies and real-world examples, students gain practical insights into how legal frameworks influence business operations and develop skills to navigate legal challenges in the business environment.
Recommended Textbook
Business Law Today Text and Summarized Cases E Standard 9th Edition by Roger LeRoy Miller
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Page 2
Chapter 1: The Legal Environment
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Q1) A defendant is a person against whom a lawsuit is brought.
A)True
B)False
Answer: True
Q2) Blizzard Entertainment,Inc.,one of the owners of the World of Warcraft (WoW)computer game,is involved in a lawsuit with MDY Industries,LLC,the owner of Glider,a software program that plays WoW for its players while they are away from their keyboards.Blizzard asks the court to direct MDY to stop selling and distributing Glider.The court's opinion in the case is at MDY Industries,LLC v.Blizzard Entertainment,Inc.,616 F.Supp.2d 958 (D.Ariz.2009).What is the name for the remedy that Blizzard is seeking? What type of remedy is it? What court decided this case? Specifically where can the court's opinion be found?
Answer: The remedy that Blizzard asks the court to provide is an injunction-defined as an order to do or to refrain from doing a particular act.An injunction is an equitable remedy.The U.S.District Court for the District of Arizona decided this case in 2009.The opinion of the court in this case-MDY Industries,LLC v.Blizzard Entertainment,Inc.,616 F.Supp.2d 958 (D.Ariz.2009)-can be found in its entirety in volume 616 of the Federal Supplement
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Page 3
Chapter 2: Constitutional Law
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Q1) A restriction on commercial speech that implements a substantial government interest may be valid.
A)True
B)False
Answer: True
Q2) The checks and balances in the U.S.Constitution prevent any one branch of government from exercising too much power.
A)True
B)False
Answer: True
Q3) State laws often significantly protect individuals' privacy rights.
A)True
B)False Answer: True
Q4) Theoretically,Congress can regulate every commercial enterprise in the United States.
A)True
B)False Answer: True
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Chapter 3: Courts and Alternative Dispute Resolution
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Q1) During the trial phase of Fuel Corporation's suit against Gas Stations,Inc.,their attorneys engage in voir dire.This is
A) the assessment of the arguments on the issues.
B) the determination of the issues to be argued.
C) the litigation of the issues and arguments.
D) the selection of jurors.
Answer: D
Q2) Inferior Company sells products that are poorly made.Jack,who has never bought an Inferior product,files a suit against the company,alleging that its products are defective.The firm's best ground for dismissal of the suit is that Jack does not have A) certiorari.
B) jurisdiction.
C) standing.
D) sufficient minimum contacts.
Answer: C
Q3) Venue is the term for the subject matter of a case.
A)True
B)False
Answer: False
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Page 5
Chapter 4: Torts and Cyber Torts
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Q1) Reaching for a bottle of soda from a display in a Bargain Mart store,Cody slips in a puddle of spilled soda and falls,suffering an injury.Bargain Mart's employees are not aware of the spilled soda until Cody falls.In a suit against Bargain Mart,Cody will most likely
A) lose, because Bargain Mart's employees were not aware of the spill.
B) lose, because Cody should have exercised more care.
C) win, because Bargain Mart can recover from the soda bottler.
D) win, because the spilled soda was foreseeable.
Q2) Kai files a suit against Lana based on one of Lana's statements that Kai alleges is fraudulent.To give rise to fraud,the statement must be one of A) emotion.
B) fact.
C) illusion.
D) opinion.
Q3) Joy invites Ken into her apartment.Ken commits trespass to land if he A) enters the apartment with fraudulent intent.
B) harms the apartment in any way.
C) makes disparaging remarks about Joy to others.
D) refuses to leave when Joy asks him to go.
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Page 6
Chapter 5: Intellectual Property and Internet Law
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Q1) A collective mark distinguishes products that are likely to be of interest to collectors.
A)True
B)False
Q2) New Apps Company develops "Browser Lite," software to speed the display of graphics on Web sites.Browser Lite has the most copyright protection under A) the Berne Convention.
B) the Paris Convention
C) the TRIPS Agreement.
D) the Madrid Protocol.
Q3) In Case 5.1,The Coca-Cola Co.v.The Koke Co.of America,the United States Supreme Court upheld an injunction prohibiting competing beverage companies from calling their products "Koke."
A)True
B)False
Q4) A patent applicant must demonstrate that the invention,discovery,or design is commercially practicable to receive a patent.
A)True
B)False
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Chapter 6: Criminal Law
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Q1) Money laundering includes making "dirty" money "clean" of legitimate businesses.
A)True
B)False
Q2) Leah gains access to government records and alters certain dates and amounts in her favor.This is
A) embezzlement.
B) forgery.
C) larceny.
D) no crime.
Q3) Jeri is indicted.Before she is arrested,she confesses to the crime in a conversation with Kelly,the arresting officer.Kelly then arrests Jeri and advises her of the right to counsel.Later,Jeri claims that her statement should be excluded as evidence from her trial.The statement will most likely be
A) admitted because Jeri knew she did the crime and confessed.
B) admitted because Jeri made it before being advised of her rights.
C) excluded because a confession is not admissible in a criminal trial.
D) excluded because it was elicited before Jeri was advised of her rights.
Q4) Only blue-collar crimes are prosecuted under RICO.
A)True
B)False
Page 8
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Chapter 7: Cyber Crime
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Q1) Gladstone regularly sends unsolicited commercial e-mail to hundreds of millions of recipients.This e-mail is prohibited or regulated in
A) most states.
B) only a few states.
C) no state.
D) California only.
Q2) Refer to Fact Pattern 7-1.Minka's software is harmful to the computers on which she installed it.This program is
A) malware.
B) badware.
C) harmware.
D) infectware.
Q3) An unknown individual launches a series of attacks against the Web sites of Prime Sales Corporation.The attacks significantly slow the sites,leading to $100 million in damage in terms of lost work time,lost revenue,site repair costs,and other expenses.The attacker does not intend to profit from the onslaught and in fact does not realize any financial benefit from the effects.How is this attack most likely orchestrated? Who is most likely to engage in this act-that is,whose habits and limitations are clearly suited to such conduct-and why?
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Page 9
Chapter 8: Ethics and Business Decision Making
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Q1) Business ethics focuses on ethical behavior in the business world.
A)True
B)False
Q2) Acting in good faith gives a business firm a better chance of defending its actions in court.
A)True
B)False
Q3) The role played by women may present some difficult ethical problems for firms doing business internationally.
A)True
B)False
Q4) Setting realistic workplace goals can reduce the probability that employees will act unethically.
A)True
B)False
Q5) Corporations can be perceived as owing ethical duties to groups other than their shareholders.
A)True
B)False
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Chapter 9: Nature and Classification
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Q1) An offer to form a bilateral contract is accepted only by completing the contract performance.
A)True
B)False
Q2) Vernon claims that his contract with Ulani is voidable.If their contract is avoided
A) both parties are released from it.
B) both parties must fully perform their obligations under it.
C) a wholly different contract is agreed to.
D) a wholly different contract is imposed "as if" the parties had agreed.
Q3) Green Grocers,Inc.,enters into a contract with Hiway Transport Company for the delivery of a shipment of fresh produce.If the language in the contract has more than one meaning,it will be construed against
A) the party who drafted the contract.
B) the party with the greater bargaining power.
C) the promisor.
D) the promisee.
Q4) Plain language laws regulate some types of contracts to require "legalese."
A)True
B)False
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Chapter 10: Agreement in Traditional and E-Contracts
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Q1) An invitation to submit bids-"how much would you charge to do this work?"-is an offer.
A)True
B)False
Q2) An effective offer requires a reasonable price related to market value.
A)True
B)False
Q3) Lovett County Bank offers to lend money to Kino,the owner of Java Stop,at 15 percent interest.Before Kino accepts,a state statute is enacted prohibiting loans at rates greater than 12 percent.Kino and the bank have
A) have a contract for a loan at 15 percent interest.
B) have a contract for a loan at 12 percent interest.
C) have a contract for a loan at 0 percent interest.
D) no contract for a loan.
Q4) An auction-"we ask you to bid on this item"-is an offer.
A)True
B)False
Q5) Most advertisements-"this property for sale"-are offers.
A)True
B)False
Page 12
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Chapter 11: Consideration, capacity, and Legality
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Q1) A minor's right to disaffirm a contract terminates sixty days after the contract's date.
A)True
B)False
Q2) Mica,a minor,signs a contract to pay Natural Health Club a monthly fee for twenty-four months to use its facilities.Six months later,after reaching the age of majority,Mica continues to use the club.This act is
A) a disaffirmance.
B) an emancipation.
C) a ratification.
D) a restitution.
Q3) A bargained-for exchange is one of the elements of consideration.
A)True
B)False
Q4) Refer to Fact Pattern 11-1.Eva's forbearance from towing is legally sufficient consideration
A) because it is a promise of something of value.
B) only if Dave's customers park in Eva's lot.
C) only if Eva's customers cannot park in her lot because it is full.
D) under no circumstances.
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Chapter 12: Defenses to Contract Enforceability
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Q1) Oral evidence of the meaning of a contract with incomplete terms can be introduced at a trial.
A)True
B)False
Q2) Clay buys an MP3 player for $200 and a pair of stereo speakers for $600 from a Discount City store,and downloads $300 worth of digital music from eMusic.com.To be enforceable,the contract that must be in writing is the purchase of A) the digital music, the MP3 player, and the speakers.
B) the MP3 player and the speakers only.
C) the MP3 player only.
D) the speakers only.
Q3) Nina and Owen enter into an oral contract for Nina's sale to Owen of a laser printer for $400.Before Owen takes possession of the printer,the contract is enforceable by A) either party.
B) Nina only.
C) neither party.
D) Owen only.
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14
Chapter 13: Third Party Rights and Discharge
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Q1) Belle enters into a contract to subdivide and sell housing lots in Cole's hillside field if Dell City annexes the property within the next year.Belle's duty to perform is A) absolute.
B) conditional.
C) illusional.
D) irresolute.
Q2) Clem attempts to free himself from the duties of his contract with Drew by telling Drew to find someone else to perform them.This is
A) a delegation.
B) an assignment.
C) a third party beneficiary contract.
D) none of the choices.
Q3) Vicky contracts with Warren for the delivery of hospice services to benefit Xavier.This is
A) a delegation.
B) an assignment.
C) a third party beneficiary contract.
D) a novation.
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Chapter 14: Breach and Remedies
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Q1) Karson orally agrees to pay Jaime to plant and harvest a quarter of Karson's farm acreage for four corn-planting seasons.After Jaime prepares the land and plants the first crop,Karson says that their deal is off.Jaime can most likely recover
A) in quasi contract.
B) in reformation.
C) in restitution.
D) on the parties' existing contract.
Q2) A party seeking to recover in quasi contract must show that he or she acted without reasonably expecting to be paid.
A)True
B)False
Q3) Consequential damages are awarded to cover all of the remote consequences of whatever injury a nonbreaching party suffers.
A)True
B)False
Q4) A breach of contract may entitle the innocent party to rescind the contract.
A)True
B)False
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Page 16
Chapter 15: The Formation of Sales and Lease Contracts
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Q1) A bailee is a buyer or lessee.
A)True
B)False
Q2) A lessor is a party who acquires a right to the possession and use of goods under a lease.
A)True
B)False
Q3) Bild-Rite,Inc.,is a Colorado-based firm that does business with clients throughout North America.Bild-Rite oversees construction projects,and buys and sells commercial buildings,undeveloped land,and construction supplies and other goods.Bild-Rite has had to deal with work-site theft and vandalism.With respect to these circumstances,the Uniform Commercial Code (UCC)provides a framework for
A) commercial transactions for the sale of and payment for goods.
B) international construction contracts.
C) domestic and foreign transactions in real estate.
D) prosecuting crimes against business interests.
Q4) Under the UCC,the validity of a contract depends on its price term.
A)True
B)False
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Chapter 16: Performance Breach of Sales Lease Contracts
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Q1) If a buyer wrongfully refuses to accept goods that conform to a contract,the seller may recover damages.
A)True
B)False
Q2) A buyer's breach of a contract will not usually give the seller the right to cancel the contract.
A)True
B)False
Q3) A buyer who obtains substitute goods to replace goods that a seller did not deliver can also recover damages from the seller.
A)True
B)False
Q4) Vehicle Leasing Agency (VLA)and Wander Trucking Company enter into a contract for a lease of eight cargo vans.VLA delivers eight vans,but they are not cargo-sized.Wander
A) cannot reject the entire shipment.
B) can reject the entire shipment.
C) must accept the entire shipment.
D) must reject the entire shipment.
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Chapter 17: Warranties and Product Liability
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Q1) The brakes on a Coastal Railroad train malfunction and it rolls towards maintenance workers on the tracks.Everyone gets out of the way except Dick,who wants to show off.The train hits Dick,who sues Everest,Inc.,the brakes' manufacturer.Everest can raise the defense of
A) a component-part manufacturer.
B) assumption of risk.
C) consumer participation.
D) product misuse.
Q2) Merchants are required to warrant that the goods they sell are fit for their ordinary purpose.
A)True
B)False
Q3) Dependable Appliances,Inc.,and Elain enter into a contract for a sale of kitchen appliances.Dependable,a merchant who deals in goods of the kind sold,notes that its goods come with an implied warranty of merchantability.Under the UCC,this means that the goods are reasonably
A) fit for the buyer's particular purpose.
B) fit for the ordinary purpose for which such goods are used.
C) suitable for resale at an acceptable price.
D) the best quality that money can buy.
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Chapter 18: Negotiable Instrument: Transferability Liability
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Q1) Superior Company draws a check payable to Ted.Uri makes a note payable to Vital Finance Corporation.Primarily liable parties include A) neither Superior nor Uri.
B) Superior and Uri.
C) Superior only.
D) Uri only.
Q2) Opal signs a promissory note payable to the order of Payday Loan Company.The note states that it is payable "with interest at the legal rate." This note is A) negotiable.
B) nonnegotiable, because it does not specify a rate of interest.
C) nonnegotiable, because it is a promissory note.
D) nonnegotiable, because it is payable only with interest.
Q3) Presentment warranties protect the person who presents an instrument for payment.
A)True
B)False
Q4) To be negotiable,an instrument must be payable in money.
A)True
B)False
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Chapter 19: Checks and Banking in the Digital Age
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Q1) A bank has no right to charge a customer's account for the amount of a stale check. A)True
B)False
Q2) Refer to Fact Pattern 19-3.When Mike receives his National statement,he demands that the bank investigate the matter and recredit his account.The bank
A) has no duty to investigate.
B) must investigate and, if the dispute is not resolved within ten days, recredit Mike's account (at least until the dispute is resolved).
C) must investigate and immediately recredit Mike's account (at least until the dispute is resolved).
D) must investigate but need not recredit Mike's account.
Q3) Refer to Fact Pattern 19-3.Mike is responsible for
A) $0.
B) $50.
C) $500.
D) $3,000.
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21
Chapter 20: Security Interests in Personal Property
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Q1) A financing statement is effective for no more than five months from the date of filing.
A)True
B)False
Q2) Lena borrows from Mac and Nicol,using the same collateral for both loans.Only Nicol has a perfected security interest.Lena defaults on both loans.The party with first rights to the collateral is
A) Lena.
B) Mac and Nicol, in proportion to Lena's debt to each.
C) Mac only.
D) Nicol only.
Q3) Filing a financing statement with the appropriate public office is the only way to perfect a purchase-money security interest in consumer goods.
A)True
B)False
Q4) A security interest may attach to intangible collateral but cannot be perfected.
A)True
B)False
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Page 22
Chapter 21: Creditors Rights and Bankruptcy
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Q1) Zeke files a petition for bankruptcy.Zeke's creditors must file with the court their proof of claims against Zeke's assets within
A) fifteen days of the creditors' meeting.
B) thirty days of the creditors' meeting.
C) sixty days of the creditors' meeting.
D) ninety days of the creditors' meeting.
Q2) Before a discharge is granted,a debtor can transfer property or make a payment in preference to one creditor over another.
A)True
B)False
Q3) A debtor's car may be exempt from satisfaction of a judgment debt.
A)True
B)False
Q4) The homestead exemption under the Bankruptcy Code is unlimited.
A)True
B)False
Q5) Almost all types of property can be garnished.
A)True
B)False
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Chapter 22: International Law in a Global Economy
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Q1) The doctrine of sovereign immunity can immunize a foreign nation from the jurisdiction of U.S.courts.
A)True
B)False
Q2) Diners Corporation,a U.S.firm,signs a contract with Essen,A,G.,a German firm,to give Essen the right to use Diners' trademark in restaurants in Germany.This is
A) a distribution agreement.
B) a joint venture.
C) direct exporting.
D) licensing.
Q3) The United States and other members of a certain organization agree to grant normal trade relations status on each other with regard to imports and exports.This organization is
A) the Convention on Contracts for the International Sale of Goods.
B) the International Export-Import Bank.
C) the United Nations.
D) the World Trade Organization.
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Chapter 23: Agency Relationships in Business
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Q1) A licensed professional can employ an unlicensed agent to perform professional actions.
A)True
B)False
Q2) Commercial Development Corporation (CDC)hires Delta Construction Company to work at a site as an independent contractor.Whether CDC will be liable for torts committed at the site by Delta depends on
A) what Delta bid for the job.
B) whether exceptionally hazardous activities are involved.
C) which party obtained insurance to cover tort liability.
D) who is paying Delta.
Q3) Brad is an employee of Custodial Service,Inc.In deciding whether Brad acts within the scope of his employment when he commits a tort against Didi,a court will not consider whether
A) Brad indicated that he was acting on behalf of Custodial.
B) Custodial authorized the act.
C) Custodial furnished the means by which the injury was inflicted.
D) the act is one commonly performed by employees for their employers.
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Chapter 24: Employment,immigration,and Labor Law
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Q1) Frida is an employee of Green Recycled Products Company.A state statute protects Frida from Green's retaliation if Frida reports to state officials,or others,that Green is involved in unsafe or illegal activity.With respect to the employment-at-will doctrine,this is
A) an example of the doctrine.
B) an exception based on contract theory.
C) an exception based on public policy.
D) an exception based on tort theory.
Q2) Unions must allow their members to participate in union meetings.
A)True
B)False
Q3) Uri is an employee of Verity Security Services.For Uri to obtain the benefits of federal wage-hour requirements,Verity must be engaged in
A) business activity.
B) employment at will.
C) international commerce.
D) interstate commerce.
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Chapter 25: Employment Discrimination
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Q1) Title VII does not cover employees' online activities.
A)True
B)False
Q2) Damages are available for victims of intentional employment discrimination based on gender,religion,age,or disability.
A)True
B)False
Q3) Mona files an employment discrimination suit against Nationwide Corporation (NC)under Title VII.If Mona shows that NC acted with malice or reckless indifference,she may recover
A) compensatory damages only.
B) compensatory or punitive damages.
C) neither compensatory nor punitive damages.
D) punitive damages only.
Q4) A victim of alleged discrimination must bring a suit against an employer before filing a claim with the Equal Employment Opportunity Commission.
A)True
B)False
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Page 27
Chapter 26: Sole Proprietorships and Private Franchises
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Q1) Doc's Sports Club enters into a franchise agreement with Elite Fitness Centers that provides for termination at any time for "cause." Doc's fails to meet Elite's "Friends and Family" membership sales quota.Is this "cause" for termination? Explain.
Q2) A sole proprietorship is a separate legal entity for tax purposes.
A)True
B)False
Q3) Comfort Wear,Inc.,a franchisor of shoe stores,wishes to standardize the pricing practices of its franchisees that have engaged in price-cutting to increase their respective shares of the market.The most prudent remedy might be for Comfort to A) reduce the quantity of the products that it sells to its franchisees.
B) suggest the prices at which its franchisees sell their products.
C) terminate the franchisees who cut prices.
D) undercut the business of those franchisees who cut prices by opening competing stores in the franchisees' territory.
Q4) Normally,a franchisee determines the territory that it will serve.
A)True
B)False
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28
Chapter 27: All Forms of Partnerships
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Q1) Bo and Clancy decide to do business as Marketing & Promotion Services.To be a partnership,this association can result from an agreement that is
A) express, but not from an agreement that is implied.
B) implied, but not from an agreement that is express.
C) oral, written, or implied by conduct.
D) written, but not from an agreement that is oral or implied.
Q2) A partner may not pursue his or her own interest without violating the fiduciary duties that he or she owes to the firm.
A)True
B)False
Q3) Erte,a partner in Fluoride Dental Associates,applies for a loan with Great State Bank allegedly on Fluoride's behalf but without the authorization of the other partners.Great State knows that Erte is not authorized to take out the loan.Erte's default on the loan results in
A) Erte and Fluoride's joint liability for the amount.
B) Erte's sole liability for the amount.
C) Fluoride's sole liability for the amount.
D) neither Erte's nor Fluoride's liability.
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29
Chapter 28: Limited Liability Companies Special Business
Forms
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Q1) QuizBooks LLC is a limited liability company.Like any other LLC,unless QuizBooks chooses otherwise,the firm will be taxed as
A) a corporation.
B) a joint venture.
C) a partnership.
D) a sole proprietorship.
Q2) In a limited liability company,members must participate in the management of the company.
A)True
B)False
Q3) National Capital Corporation and International Investments,Inc.,form a joint stock company.The ownership of a joint stock company is represented by A) partnership certificates.
B) shares of stock.
C) title documents.
D) trust certificates.
Q4) A syndicate may be organized as a corporation but not as a partnership.
A)True
B)False
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Chapter 29: Corporate Formation, merger, and Termination
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Q1) Any person who buys preferred stock has priority over a holder of common stock to payment on the corporation's dissolution.
A)True
B)False
Q2) Raw Resources Corporation authorizes Stefan,its employee,to oversee its mining operation.In the course of this employment,Stefan disposes of the mine's waste illegally.Liability for this crime most likely rests with
A) neither Raw Resources nor Stefan.
B) Raw Resources and Stefan.
C) Raw Resources but not Stefan.
D) Stefan but not Raw Resources.
Q3) A corporation cannot be formed without a profit-making purpose.
A)True
B)False
Q4) A business that holds itself out as being a corporation may not be able to deny corporate status,even if it makes no attempt to incorporate.
A)True
B)False
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Chapter 30: Corporate Directors, officers, Shareholders
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Q1) Corporate officers and directors owe no duty to individual shareholders. A)True
B)False
Q2) Clifton is a director of Dri-Cleaning Corporation.In this capacity,Clifton has a right of A) accounting. B) loyalty.
C) participation.
D) service.
Q3) Shares issued for more than their fair market value are known as watered stock. A)True
B)False
Q4) Some states permit a corporate board to have fewer than three directors. A)True
B)False
Q5) A board of directors cannot conduct business outside a formal meeting. A)True B)False
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Chapter 31: Investor Protection, insider Trading, Corp Gov
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Q1) Madison is the chief executive officer of Nitro Medico,Inc.,which is required to file certain financial reports with the Securities and Exchange Commission (SEC).Under the Sarbanes-Oxley Act of 2002,Madison must
A) certify that the reports are complete and accurate.
B) designate a corporate official to assume liability for inaccuracies.
C) do nothing.
D) read the reports and be prepared to answer questions about them.
Q2) Frothy Beverage Corporation is a public company whose shares are traded in the public securities markets.Under the Securities Act of 1933,Frothy is required to
A) contribute to the operations of national stock exchanges.
B) disclose financial and other information about its securities.
C) engage in market surveillance to deter undesirable practices.
D) solicit proxies for voting.
Q3) Sales of securities must occur within twenty days of registration.
A)True
B)False
Q4) Most securities can be resold without registration.
A)True
B)False
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Chapter 32: Promoting Competition
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Q1) To violate antitrust law,an activity must involve two or more persons.
A)True
B)False
Q2) Lightning Cycles,Inc.,makes Lightning-brand motorcycles and accessories,which are distributed to authorized dealers,including Macho Motors,Inc.Macho operates dealerships in several locations.Lightning imposes territorial restrictions on Macho to insulate other dealers from direct competition.This is
A) a horizontal restraint.
B) a lateral restraint.
C) a vertical restraint.
D) not a restraint.
Q3) Only private individuals can enforce the antitrust laws.
A)True
B)False
Q4) A joint refusal to deal with a particular person or firm is always a violation of antitrust law.
A)True
B)False
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Chapter 33: Consumer and Environmental Law
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Q1) The common law doctrine of nuisance prevents individuals from filing "nuisance" suits against polluters.
A)True
B)False
Q2) A loan between two consumers is subject to the Truth-in-Lending Act.
A)True
B)False
Q3) Federal law prohibits vague generalities and obvious exaggerations in advertising.
A)True
B)False
Q4) Midwest Power Corporation wants to build a nuclear power plant on private land,for which a federal permit is required.For this action,an environmental impact statement is A) prohibited.
B) required.
C) unnecessary.
D) voluntary.
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Chapter 34: Liability of Accountants Other Professionals
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Q1) Quentin,an accountant,prepares for Ruff n' Reddy Concrete Corporation a financial statement that omits a material fact.The statement is included in Ruff n' Reddy's registration statement filed with the Securities and Exchange Commission.Timor,who reads the statement,and Ubi,who does not,each buy Ruff n' Reddy stock.Under Section 11 of the Securities Act of 1933,Quentin may be liable to
A) neither Timor nor Ubi.
B) Timor and Ubi.
C) Timor only.
D) Ubi only.
Q2) Working papers are the documents through which a court orders an accountant to audit a public company.
A)True
B)False
Q3) Generally accepted accounting principles represent guidelines rather than a standard of care.
A)True
B)False
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36
Chapter 35: Personal Property and Bailments
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Q1) Constructive delivery occurs when property is physically transferred.
A)True
B)False
Q2) Owen takes a Paisley-made pinball machine to Quality Games,Inc.,for repair.Lacking certain parts,Quality ships the game to Regal Repair Company.While in Regal's possession,the game is damaged.Quality can recover for the damage from A) no one.
B) Owen.
C) Paisley.
D) Regal.
Q3) Helen owns heavy construction equipment and the tools to service it,as well as office furniture,including computers.Ilya owns a number of patents,trademarks that identify the products made under those patents,and stock in the company that sells those products.Personal property includes the items owned by
A) Helen and Ilya.
B) Helen only.
C) Ilya only.
D) neither Helen nor Ilya.
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Chapter 36: Real Property and Landlord-Tenant Law
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Q1) A tenant has a duty to maintain in a reasonably safe condition those areas under his or her control.
A)True
B)False
Q2) Chita owns the land on which Downwind Farm is situated,plus the farmhouse,barn,and other structures permanently attached to the land.Chita's brother Elvin owns everything else on the farm-implements,seed,and so on.The real property is owned by
A) Chita and Elvin.
B) Chita only.
C) Downwind Farm.
D) Elvin only.
Q3) Eminent domain is the right of an owner in fee simple absolute to use his or her property in whatever way he or she wishes.
A)True
B)False
Q4) Land includes all of the waters on or under its surface.
A)True
B)False
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Chapter 37: Insurance, wills, and Trusts
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Q1) A divorce occurring after the execution of a will revokes dispositions of property to the former spouse.
A)True
B)False
Q2) An insurance application is usually not part of the insurance contract.
A)True
B)False
Q3) Juli types onto a computer what she intends to be "My Will" and prints it out.Juli has capacity."My Will" is
A) invalid.
B) valid if Juli signs it.
C) valid if Juli signs it and has three witnesses sign it.
D) valid if Juli signs it, has three witnesses sign it, and files it in a certain state office.
Q4) In most states,a person must be sixteen years of age to execute a valid will.
A)True B)False
Q5) Insurance is classified according to the amount of the payment on a claim.
A)True B)False
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