An indenture is not a debt agreement.
a. True
b. False
The purpose of Article 2 of the UCC is to modernize, clarify, simplify, and make
uniform the law of sales.
a. True
b. False
Apparent authority is not actual authority.
a. True
b. False
In order for a full warranty to be given for a consumer product, the manufacturer must
provide that:
a. the product will be repaired for free.
b. the warranty lasts for at least 10 days.
c. the consumer can opt for replacement if the product is unsatisfactory.
d. consequential damage cannot be excluded.
The Sarbanes-Oxley Act:
a. allows the SEC to add criminal penalties to a disgorgement fund for the benefit of
victims of violations of the 1933 and 1934 securities acts.
b. requires an outside CPA and the corporate treasurer to certify the financial and other
information contained in the issuer’s annual and quarterly reports.
c. requires that issuers of securities disclose in plain English to the public on a rapid and
current basis such additional information concerning material changes in the financial
condition or operations of the issuer as the SEC determines is necessary or useful.
d. All of these.
If a “liquidation preference” is provided, preferred stock usually has priority over
common stock to the extent the articles of incorporation state.
a. True
b. False
Arthur fired a gun in the middle of the desert. He intended to fire the gun, but had no
reason to believe anyone else was in the area. The bullet hit Bob, who happened to be
riding his ATV across the desert. In this case:
a. Arthur has committed the tort of assault.
b. Arthur has committed the tort of battery.
c. it is unlikely that Arthur has the necessary intent to commit a tort.
d. Arthur has committed the tort of intentional infliction of emotional distress.
Rose is working hard on Arlin’s mayoral campaign. She thinks that just a few more
votes could win the election, so she promises to pay her friend Violet $50 if she will
register and vote for Arlin. Violet does so, but Arlin loses the election, and Rose now
refuses to pay. Roses agreement to pay Violet:
a. is enforceable.
b. is unenforceable and opposed to public policy.
c. is an agreement to obstruct the administration of justice.
d. is an unconscionable contract covered by the UCC.
An express trust may be found if the intent of the grantor to create a trust is
unmistakable.
a. True
b. False
All laws are related to morals, but some moral precepts are not enforced by legal
sanctions.
a. True
b. False
A will entirely in the handwriting of the testator is called what type of will?
a. Nuncupative.
b. Holographic.
c. Conditional.
d. Codicil.
Russell and Joe make a contract for Russell to manufacture five leather chairs of a
specified design. Prior to their manufacture, the factory is destroyed in an accidental
fire that is no one’s fault. If the chairs are available from other sources:
a. Russell must supply the chairs, even if he must buy them elsewhere.
b. Russell’s duty to deliver the chairs is discharged by the destruction of the factory.
c. Russell has materially breached the contract if he fails to deliver the chairs.
d. (a) and (c) are correct.
Upon paying the principal debtor’s entire obligation, the surety is __________ the rights
of the creditor.
a. subject to
b. subrogated to
c. exonerated by
d. set off by
Under the CISG, the seller must deliver goods, unless otherwise agreed, that are fit for
the purposes for which goods of the same description would ordinarily be used.
a. True
b. False
If a UCC contract does not contain all the terms necessary to carry it out, there will be
no contract.
a. True
b. False
Non-bankruptcy compromises to give debtors relief while protecting the rights of
creditors include:
a. compositions.
b. non-statutory assignments for the benefit of creditors.
c. receiverships under the direction of a court with equity powers.
d. All of these.
The Securities Act of 1933 is also called the “Truth in Securities Act.”
a. True
b. False
Julian threw a brick at Will, intending to hit him. If the brick instead hits Anna, Julian
has:
a. committed a battery.
b. committed an assault.
c. no liability if he has not yet reached the age of majority.
d. not committed a tort because he did not have the intent to harm Anna.
Many jurisdictions now require all sellers to disclose hidden defects that materially
affect the property’s value if reasonable examination would not reveal such defects.
a. True
b. False
Wayne helped Hank study all night for an important exam. After Hank got an “A” on
the exam, he told Wayne, “I will give you $10 for helping me get a good grade.” Wayne
said, “Thanks, I’ll take it.” There is:
a. no contract because there is no mutual assent.
b. no contract because there is no valid consideration.
c. no contract because $10 is reasonably inadequate consideration.
d. a contract with sufficient consideration.
Which of the following could give rise to an accountant’s criminal liability?
a. Falsely completing a tax return.
b. Tampering with accounting records.
c. Advising a client to falsely complete his own tax return.
d. All of these could subject an accountant to criminal liability.
Louella purchases a steam cleaner from Alden for $1 She must believe Alden is the
owner of or has the authority to sell the cleaner in order to receive the protection of a
good faith purchaser.
a. True
b. False
An agreement to refrain from a particular trade, profession, or business is enforceable
if:
a. the purpose of the restraint is to protect a property interest of the promisee.
b. the agreement is for no longer than two years.
c. the restraint is no more extensive than is reasonably necessary to protect the
promisees property interest.
d. Two answers are correct but not all three.
If Sam writes a check drawn on his account at First Bank to State University to pay his
tuition:
a. Sam is the drawer.
b. the university is the drawee.
c. the bank is the payee.
d. Sam is the maker.
Assume there are no provisions in the corporation’s articles of incorporation or bylaws
regarding quorum requirements. If there are 13 total directors of General Grain
Corporation and the minimum number of directors are present to transact business, how
many votes normally would be necessary for those present to act as a board?
a. 7
b. 4
c. 6
d. 11
The National Cooperative Research Act provides that:
a. joint ventures in the research and development of new technology are to be judged
under the rule of reason test.
b. treble damages apply to all joint ventures formed in violation of the antitrust laws.
c. joint venture participants must under all circumstances report their intent to the
Justice Department.
d. joint ventures formed to divide markets and fix prices are not illegal.
Indorsements with ineffective restrictions include which of the following?
a. The indorser makes the rights of the indorsee subject to the happening or
nonhappening of a specified event.
b. An indorsement “For Collection.”
c. An indorsement stating “Pay to Melanie for Sharon.”
d. All of these.
Which of the following is not true about chlorofluorocarbons (CFCs)?
a. They deplete the ozone layer.
b. By 1985, scientists believed that the release of CFCs into the atmosphere had caused
a hole in the ozone layer in the stratosphere.
c. There are no synthetic substitutes for CFCs.
d. CFCs are extremely potent greenhouse gases.
Article 9 of the UCC is flexible, simple, and it allows a variety of forms of secured
financing.
a. True
b. False
The consolidation of AB Corporation and ZX Corporation requires the affirmative
majority vote of:
a. the boards of directors and shareholders of both corporations.
b. the boards of directors of both corporations, but not the shareholders.
c. the shareholders of both corporations, but not the boards of directors.
d. the directors and shareholders of one of the corporations, but not both corporations.
In recent years, accountants have been subject to civil lawsuits based on the
Racketeering Influenced and Corrupt Organizations Act.
a. True
b. False
Statutes of repose were enacted to give consumers more rights against large
manufacturers.
a. True
b. False
Where a contract is unenforceable because of the statute of frauds, a party may recover
the benefits conferred on the other party in reliance on the contract.
a. True
b. False