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Which of the following opinions indicates that the company's financial statements fairly
present its financial condition according to GAAP?
a. Qualified opinion.
b. Adverse opinion.
c. Disclaimer of opinion.
d. Unqualified opinion.
Under a state law, a dog owner is absolutely liable to any person who is injured by the
dog. This is an example of:
a. negligence per se.
b. strict liability.
c. res ipsa loquitur.
d. negligence.
Kelly is upset with her supervisor and believes his conduct violates the terms of her
union's collective bargaining agreement (CBA). The union filed a grievance on Kelly's
behalf. Who will conduct the grievance hearing?
a. The U.S. Court of Appeals.
b. The National Labor Relations Board.
c. A member of the company's management team.
d. A replacement worker.
Valley National Bank issued a note promising to repay an investor on October 1, 2011,
three years from the date of issue, plus interest. The note:
a. is a certificate of deposit, and it will pay a lower rate of interest than a regular savings
account at Valley.
b. is a certificate of deposit, and it will pay a higher rate of interest than a regular
savings account at Valley.
c. is a certificate of deposit, and whether the bank pays a higher or lower rate of interest
than it pays on its regular savings accounts depends upon particular bank policy.
d. constitutes a trade acceptance.
TriColor purchased an industrial stamping machine from Vicy, Inc. TriColor paid for
the machine with a negotiable note. The note was payable to the order of Vicy, Inc.
Vicy, Inc. indorsed the note and gave it to CCLoans to satisfy a debt. CCLoans knew
nothing about the contract between TriColor and Vicy, Inc. CCLoans indorsed the note
and gave it to Great River Youth Club as a charitable donation. When Great River Youth
Club presented the note for payment on its due date, TriColor refused to pay, claiming
that the stamping machine was defective.
Jackie and Robert own an apartment building as partners. Cyndi, one of their tenants,
gives Robert written notice she will be moving out at the end of the following month.
Robert did not tell Jackie that Cyndi was moving. Has Cyndi properly given notice to
the partnership?
a. Yes. Notice to Robert was notice to the partnership.
b. Yes, if it is determined that Robert acted negligently in failing to notify Jackie.
c. No. Cyndi has an obligation to notify both Robert and Jackie.
d. No. Jackie was not notified since Robert never told her Cyndi was moving.
At her neighbor's garage sale, Constance buys a vanity dressing table from her
neighbor, Carlos, for $160. Constance purchased the vanity table for her own personal
use, without any knowledge that Carlos had signed a security agreement giving All
Purpose Furniture, Inc. a security interest in the vanity table. All Purpose Furniture did
not file a financing statement. Constance does not know that Carlos is still paying off
the purchase money security interest and owes All Purpose Furniture, Inc. $400. Under
these circumstances:
a. Constance takes the vanity table subject to All Purpose's security interest because All
Purpose's security interest automatically perfected. A perfected security interest takes
priority.
b. Constance takes the vanity table free of All Purpose's security interest because she is
a buyer of consumer goods
c. Constance takes the vanity table free of All Purpose's security interest because she is
a buyer in the ordinary course of business.
d. Constance must pay All Purpose $400 or the table must be resold, and she and All
Purpose will proportionately share the proceeds from the sale of the table.
SharCo and Blyron Productions are each applying for a television license. In deciding
which applicant is better qualified, the FCC will hold an initial hearing before:
a. the OSHA.
b. an administrative law judge.
c. an administrative mediator.
d. a House-Senate Conference Committee.
Percival takes his computer to a repair shop to have the disk drive repaired. This is most
likely a:
a. bailor benefit bailment.
b. bailee benefit bailment.
c. mutual benefit bailment.
d. leasehold arrangement.
The Bill of Rights refers to:
a. the inalienable rights found at the beginning of the Constitution.
b. the first ten amendments to the Constitution.
c. a specific listing of individual rights found in the original text of the Constitution.
d. a grouping of individual rights set forth by the United States Supreme Court shortly
after the Constitution was ratified by the states.
Personal property means all property other than:
a. soil, plants, and trees removed from the land.
b. minerals and crops removed from the land.
c. land and all things permanently attached to the land.
d. intangible property.
Verne has possession of a draft that has been validly negotiated to him. His payment
process necessarily includes:
a. presentment of the draft, dishonor, and notice of dishonor.
b. exhibiting the instrument, showing reasonable identification, and surrendering the
draft if it is paid in full.
c. exhibiting the draft, providing a thumbprint signature, and giving a receipt.
d. suspending the underlying debt, applying the shelter rule, and making a demand for
payment.
Hasbro, Inc., the trademark owner of "Candy Land," sought a court injunction to stop
Internet Entertainment Group, LTD from using the domain name, "candyland.com."
Internet Entertainment Group had established a sexually explicit site at the domain
name. This injunction would have to be issued by:
a. a jury.
b. a judge exercising equitable powers.
c. an executive order.
d. a subpoena.
Cheryl enters into a contract with Gabe. In this contract, Cheryl asks Gabe to pay the
money he owes her from the contract to her friend Leah because Leah is having
financial troubles. Leah is:
a. a third party creditor beneficiary.
b. a third party donee beneficiary.
c. a third party incidental beneficiary.
d. the promisee in the contract.
A corporate board's refusal to remove a "poison pill" was held reasonable in:
a. Lippman v. Shaffer.
b. Unocal Corp. v. Mesa Petroleum Co.
c. Moore Corp. Ltd. v. Wallace Computer Services, Inc.
d. Anderson v. Bellino.
The Johnsons decided to sell their summer cabin on Beech Lake. They sent flyers out to
all who previously had expressed an interest in buying the cabin stating that they were
planning on selling their cabin. The flyer described the location of the property, the size
of the lot, and the price. If one of the recipients responds by sending a letter accepting,
an agreement:
a. will not be formed because the flyer was sent out as an invitation to make an offer.
b. will be formed because the first to respond gets the property.
c. will be formed because the price is included.
d. will not be formed because of the parol evidence rule.
Which of the following is NOT a standard provision frequently found in contracts?
a. choice of forum.
b. choice of law.
c. choice of compensation..
d. arbitration.
Which of the following types of concurrent ownership does not provide for rights of
survivorship?
a. Joint tenancy.
b. Tenancy in common.
c. Tenancy by the entirety.
d. All of the above provide for rights of survivorship.
A nonparty to a contract may enforce the contract if the person is:
a. a donee beneficiary.
b. an incidental beneficiary.
c. a creditor beneficiary.
d. Both a and c.
Generally, indorsers are not liable under signature liability if:
a. they write the words "without recourse" next to their signatures on the instrument.
b. they are not the drawee.
c. a check is presented for payment within 30 days after the indorsement.
d. they are an accommodation party.
Tom indorsed a check made payable to the order of Tom Jones as follows:
Raymond negotiated the check to his landlord for his rent. Raymond indorsed the check
as follows:
With regard to Tom's indorsement, which statement is correct?
a. Tom has secondary contractual liability on the check as an indorser.
b. Tom has no contractual liability on the check because he is the payee.
c. Tom has primary contractual liability on the check as payee.
d. Tom eliminated his liability as an indorser by the type of indorsement he used.
Jackie hires Charles to lay new carpet in her bedroom. Charles does such a bad job, that
the only way to fix the carpet is to start over and relay the carpet. Which of the
following best describes this situation?
a. This is substantial performance. Jackie must still pay something to Charles.
b. This is a material breach. Jackie must still pay something to Charles.
c. This is substantial performance. Jackie owes nothing to Charles.
d. This is a material breach. Jackie owes nothing to Charles.
A board of directors is considering whether to invest a great deal of money into research
and development. Such a decision could have a long-term beneficial effect for the
company's future. As an alternative, the board could forego the expenditure into
research and development and buy back its own shares in order to immediately increase
the company's reserves. Which of the below groups would most likely favor the option
to increase the company's reserves and not invest in more research and development?
a. Management.
b. Shareholders.
c. Stakeholders other than the shareholders.
d. Employees.
Mary contracted to buy 100 table lamps. Under the terms of the agreement, Mary is to
pay for the lamps upon delivery. This is an example of:
a. a condition precedent.
b. a concurrent condition.
c. a condition subsequent.
d. a service condition.
Online auctions:
a. are the major source of consumer complaints about online fraud.
b. involve approximately $1 million worth of goods annually.
c. allow people to bid on their own goods.
d. allow owners of goods to cross-bid with a group of other sellers.
A+ Modeling Agency signs a contract with Sandi to do a photo shoot for the local used
car dealers advertising. The contract was probably written by:
a. The owner of A+ Modeling Agency.
b. Sandi.
c. A+ Modeling Agencys lawyer.
d. Sandis lawyer.
The three branches of government in the United States are:
a. the executive, legislative, and administrative.
b. the administrative, executive, and statutory.
c. the executive, legislative, and judicial.
d. the administrative, legislative, and international.
The employer has the right to monitor a workers electronic communication:
a. in the ordinary course of business.never
b. The communication is made during business hours.
c. except if it does not relate to work
d. If the employer provided the computer where the communication is stored.
Alex is a director of ABC, Inc. Alex wants to personally make a major purchase from
Bravo Co. If it knew of the opportunity, ABC might be also interested in making that
same purchase. Alex must:
a. advise the boards of both corporations of his conflict of interest.
b. first offer the opportunity to make the purchase to the disinterested directors of ABC
or its shareholders.
c. resign from the board of directors.
d. abandon the idea of making the purchase himself.
Fundamental rights include all EXCEPT the right to:
a. drive.
b. vote.
c. free speech.
d. travel.
Felicia, an elderly woman, does not speak or read English well. Felicia is a recent
immigrant to this country. A dishonest immigration officer tells Felicia to sign several
documents as being necessary to maintain her legal alien status. Unknown to Felicia,
she signs a promissory note. The immigration officer thereafter sells the note to
Neighborhood Bank, a holder in due course, who goes after Felicia for payment of the
note. Felicia's defense to the Neighborhood Bank is:
a. fraud in the inducement; a real defense.
b. fraud in the execution; a real defense.
c. unauthorized completion; a personal defense.
d. breach of contract; a real defense.
Linda, a partner, is involved in the winding up of the partnership. A lucrative business
opportunity for the partnership arises. Linda does not have the right to take on this new
business.
Corporations have a distinct advantage over other forms of business organization in the
area of taxation.
Researchers have found that the EIS process generally does not have a beneficial
impact on the environment.
What elements are necessary for an offer to be valid? Give two examples of nonoffers.
If an employee is an employee at will, the common law allows the employer to fire the
employee for a good reason, a bad reason, or no reason at all.
Under the ECPA any intended recipient has the right to disclose the content of an email
Although the United States government officially signed the GATT treaty, the United
States Congress has refused to ratify the agreement.
Most, but not all, contract rights are assignable.
Explain the difference between a debit and a credit card and discuss the potential
liability for a lost or stolen card.
Isabel, Wesley, Gina, and Lucas worked together intensively to form and become the
only shareholders of a corporation that is environmentally conscious. Is there anything
they can do to avoid having shares of stock in their company sold to someone who does
not share their vision for the environment?
Ricardo has agreed to sell his family farm to Walter for a price of $450,000. Even
though both sides agree on the terms, it is still worth the money for Ricardo to hire a
lawyer to write the contract.
Marcy and Elliot are both sophisticated merchants who deal in diamonds. Marcy
contracted to purchase a diamond for $20,000. The day after the purchase, Marcy took
the diamond to a jeweler's show but the highest offer for the diamond was only
$10,000. Is Marcy's contract for purchase of the diamond for $20,000 unconscionable?
The doctrine of precedent is binding on all courts from county courts to the U.S.
Supreme Court..
If a trademarked name acquires a generic meaning, the owner of the trademark loses
protection.
Under the UCC, the buyer is entitled to consequential damages if the seller could have
reasonably foreseen them.
