Stephen, the chief of operations of an insurance company, accepts bribes in exchange of
expediting paperwork regarding applications for certain insurance policies. In terms of
the duty of loyalty, Stephen’s behavior is an example of ________.
A) competing with the corporation
B) making a secret profit
C) piercing the corporate veil
D) violating a voting trust
A complainant may file his or her employment discrimination claim with the ________
instead of the EEOC.
A) Civil Service Commission
B) Merit Systems Protection Board
C) Fair Employment Practices Agency
D) Office of Personnel Management
Which of the following statements is true about an agent?
A) It refers to a party who agrees to act on behalf of another.
B) It refers to a party who employs another person to act on his or her behalf.
C) It refers to a party that directs a worker under an express or implied contract of
employment.
D) It refers to a party who receives the services of another for remuneration.
The person or persons, partnerships, or corporations that are responsible for
incorporation of a corporation is known as a(n) ________.
A) promoter
B) shareholder
C) incorporator
D) director
________ are mergers between firms in totally unrelated businesses.
A) Market extension mergers
B) Conglomerate mergers
C) Horizontal mergers
D) Forward vertical mergers
The U.S. Department of Agriculture places mandatory and consistent labeling
requirements on ________.
A) ready-to-eat meals
B) raw fruits
C) raw vegetables
D) meat and poultry products
The words “patent pending” are placed on a prospective patent when the patent
application is ________.
A) assigned a patent number and its validity is verified
B) approved and the patent is granted
C) filed but the patent has not yet been issued
D) rejected and the patent is denied
A(n) ________ is any computer system that has been established by a seller to accept
orders.
A) electronic agent
B) sales force
C) spam
D) e-license
________ liability is defined as liability without fault.
A) Absolute
B) Contingent
C) Fixed
D) Strict
________ is an action to undo a contract.
A) Rescission
B) Recession
C) Restitution
D) Inception
The ________ branch of the federal government has the power to enforce the law.
A) judicial
B) legislative
C) executive
D) commissary
Sixteen-year-old Frank bought a video game console from John for $150. Frank is a
minor, while John is a competent adult. A month later, the console started
malfunctioning on its own. Frank returned the console to John. If Frank disaffirms his
contract with John for buying the console, which of the following will be considered
true?
A) John is not bound by the contract anymore as the exchange has been completed.
B) Frank can reclaim full refund of the amount he paid.
C) Frank can only ask for full refund once he has reached the age of majority.
D) Frank is legally obligated to fix the console before returning it to John before
claiming full refund.
Property that an owner has discarded with the intent to relinquish his or her rights in it
is known as ________ property.
A) real
B) lost
C) mislaid
D) abandoned
Donald, who is a resident of Louisiana, is robbed in Oklahoma County, Oklahoma. The
robber, who is a resident of the state of Texas, is soon apprehended. Which of the
following is the proper venue to hear this case?
A) state court in Louisiana because the plaintiff is from Louisiana
B) state court in Texas because the defendant is from Texas
C) Oklahoma federal court because the robber has committed a federal crime
D) Oklahoma County Court because it is nearest in location to the scene of the crime
Jill Scott is an accountant with Cameron and Associates, a law firm in Seattle. The firm
maintains a checking account with Southern Rock Bank for its operating expenses. On
the 10th of every month, Jill gets an inventory report from the office manager listing the
office supplies that are needed. Jill places the appropriate orders with Office Depot and
writes them a check against the office’s checking account. In the above banking
transaction, Cameron and Associates is the ________.
A) indorser
B) payee
C) drawer
D) holder
Penta Timber plans on taking over Treerings Furniture. Penta acquires a block of stock
in Treerings and then makes a tender offer to Treerings’ shareholders. After a week,
Penta decides to give up the tender offer if Treerings agrees to buy back the stock at a
5% premium over the fair market value. This payment is an example of a(n)________.
A) proxy
B) appraisal
C) greenmail
D) flip-over rights plan
With respect to commercial speech, the government can ________.
A) subject it to time, place or manner restrictions, but not prevent it
B) prevent it entirely only upon the consent of two-thirds of the Senate
C) prevent it if the Congress and the President agree
D) entirely restrict or prevent it, so long as the speech does not have political content
John buys a watch for $100 at a vintage store. Later, the store learns that the watch was
worn by Sean Connery in a James Bond movie and wishes to rescind the sales contract
they had with John. Which of the following statements is true in this regard?
A) The store can rescind the contract immediately and refund $100 to John.
B) The store can recover from John the difference between the value of the watch and
the amount paid by John.
C) The store can declare the contract void and pay John no money.
D) The store cannot rescind or void the contract.
Which of the following is true of religious discrimination under Title VII?
A) Only monotheistic religions are covered under Title VII.
B) An employer should reasonably accommodate religious observances or practices of
its employees at the workplace.
C) An employee who claims religious discrimination cannot sue the employer for any
other violation of Title VII.
D) Religious organizations cannot give preference in employment to individuals of a
particular religion.
A certain state in the United States declares that its citizens should only wear “modest”
clothing. Which of the following conclusions is made when this law is tested for
substantive due process?
A) unconstitutional for compulsion
B) invalid for violation of equal protection clause
C) void for vagueness
D) invalid for violating freedom of expression
________ refers to a court’s jurisdiction over the parties to a lawsuit.
A) In rem jurisdiction
B) Quasi in rem jurisdiction
C) In personam jurisdiction
D) Sua sponte
Which of the following provides the broadest standard for holding accountants liable to
third parties for negligence?
A) due diligence defense
B) the foreseeability standard
C) the Ultramares doctrine
D) exclusionaryrule
Which of the following has to be necessarily proved by a claimant pursuing
compensation for an injury, under workers’ compensation?
A) The claimant was harmed intentionally by the employer.
B) The claimant was harmed when he or she was employed by the employer.
C) The claimant was harmed by an employment-related injury.
D) The claimant was harmed unintentionally by the employer.
________ is a mistake made by both parties concerning an object that is important to
the subject matter of a contract.
A) Mutual mistake of value
B) Mutual mistake of material fact
C) Elementary unilateral mistake
D) Fraud by concealment
Which of the following statements is true of accountants’ work papers?
A) Work product immunity protects only the work papers generated by an accountant
during an audit.
B) Notes reconciling the accountant’s report and the client’s records and accountants’
comments are not considered as accountants’ work papers.
C) All states protect accountants’ work papers from discovery.
D) Federal law allows for discovery of an accountant’s work papers in a federal case
against the accountant’s client.
A law is passed that establishes airline security screening requirements for male
passengers that differ from the requirements for female passengers. In evaluating an
equal protection challenge to this law, a court would use ________.
A) strict scrutiny
B) intermediate scrutiny
C) limited scrutiny
D) the rational basis test
The bank on which a check is drawn is called the ________.
A) drawer
B) drawee
C) payee
D) indorser
Which of the following is a limitation to employers’ ability to inquire into an applicant’s
disability?
A) Employers cannot ask about the severity of a disability.
B) The information obtained by employers should not be kept confidential.
C) The job-related performance of an applicant should not be inquired about by
employers.
D) Postemployment medical examinations should not be conducted on applicants.
A(n)________ is defined as intentional misrepresentation or omission of a material fact
that is relied on by the client and causes the client damage.
A) unqualified opinion
B) actual fraud
C) disclaimer of opinion
D) constructive fraud
Which of the following is true of contracts?
A) A void contract is one where a party has the option to avoid his or her contractual
liability.
B) A voidable contract is one in which a party has the option to nullify his or her
obligation under the contract.
C) A voidable contract is one that has no legal effect because one of the essential
elements is missing.
D) An executory contract is considered unenforceable.