The WTO is:
a. a world trade organization that regulates trade among its member nations.
b. a treaty negotiated by the European Union to regulate its trade
c. a world court established by the GATT treaty that hears trade disputed.
d. none of these answers is correct.
What level of owners liability does a trespassing adult have
a. lowest level
b. mid level
c. higher level
d. highest level
Ed was an independent owner of a chain of TV stores. He successfully got customers
into his store by cutting his prices on widely advertised name-brand products in order to
sell other products for which he received a bigger profit. When the manufacturers of
three of the name-brand products discovered Ed’s actions, they agreed secretly to stop
selling him their TVs. The three manufacturers:
a. are doing nothing illegal, as they did not get Ed to agree to anything.
b. are free to agree not to deal with Ed since the public can go elsewhere and will not be
hurt economically.
c. can choose either as a group to deal or not to deal with any retailer they want.
d. are engaged in a rule of reason violation of the antitrust laws if their action harms
competition.
A union declares its workers are going on strike. The employer states the collective
bargaining agreement is still in force for another eight months and that it contains a
no-strike clause. The union claims the CBA’s no-strike provision is not binding since
new union leadership is in place. Which of the following statements is correct?
a. The union can strike since new leadership is now in control.
b. The union can strike since no-strike provisions have been ruled by the courts to be
unenforceable.
c. The union cannot strike, as strikes to exert economic pressure on management are
prohibited by the NLRA.
d. The union cannot strike because of the no-strike clause in the contract.
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.
The National Relations Labor Act of 1935 is also known as the:
a. Wagner Act.
b. Taft-Hartley Act.
c. Robinson-Patman Act.
d. Freedom to Work Act.
Which of the following can be negotiable?
a. A promissory note that states, “Pay to Floyd Burchett $3000 on September 1, 2015.”
b. A check written on the standard check form that does not state the date it was issued.
c. A promissory note from Farmer Douglas to Hainey Seeds, Inc. promising to pay for
the seed purchased in the spring with bushels of grain harvested in the fall.
d. An oral promise to pay to the order of Justin $500 on demand.
An instrument is negotiable if it satisfies six standards. Which of the following is a
standard of negotiability?
a. The instrument can be oral provided there is proof beyond a reasonable doubt.
b. The instrument must be payable on demand.
c. The instrument must be conditional.
d. The instrument must state a definite sum of money.
For the purposes of the statute of frauds, an interest in land includes:
a. a house.
b. a real estate mortgage.
c. an easement.
d. All of the above.
The single recovery system
a. requires a party to choose one source of damages to sue for.
b. Allow a party to sue one defendant and then apportion the judgement among all the
defendants
c. Only lets a party sue one time for damages
d. requires a court to settle a matter once and for all.
E-presto, Inc. has established an EthicsLine. EthicsLine is a toll-free phone number that
employees can call any time of the day, any day of the week to discuss ethics and report
suspected unethical or improper conduct. Why would E-presto establish the EthicsLine?
a. Ethical behavior improves productivity.
b. Ethical behavior increases job stability.
c. Unethical behavior can destroy a business.
d. All of the above are reasons that would justify establishing an EthicsLine.
Which school of jurisprudence is based on the philosophy that what matters is not what
is written as law, but who enforces the law and by what process?
a. Legal positivism.
b. Natural law.
c. Legal realism.
d. Sovereign selection.
Stuart is vying for a promotion, but faces competition from a co-worker, Brenda.
Without authorization, Stuart accesses stored company records and discovers an
unfavorable e-mail message Brenda had written about the company. Stuart sends the
message to his supervisor in hopes of keeping Brenda from getting the promotion.
Discuss whether Stuart has violated any statute and, if so, what sanctions he may face.
Common law refers to:
a. law that is the same or similar in all the states.
b. law made when judges decide cases and then follow those decisions in later cases.
c. law made by legislatures in the form of statutes.
d. the legal systems of France, Germany, and Italy.
John discovered his company’s accountant was ‘skimming” money from the business.
The accountant agreed to pay John a one-time payment of $25,000 not to report the
skimming to company officials. The accountant promised she would pay the money
back when she could. John accepted the money and never reported what he knew. A
year later the accountant was fired when the embezzlement was discovered. She was
also prosecuted for theft. The payment to John was never discovered. Which statement
is correct?
a. John’s act was unethical and illegal.
b. John’s act was unethical but not necessarily illegal.
c. John’s act was ethical since he believed the accountant would return the money;
however, it was illegal.
d. Based on the facts, John’s conduct was both ethical and legal given the special
circumstances of this case.
Debra and Lawrence have an equal partnership. This year, after expenses, the
partnership had a profit of $200,000. Debra and Lawrence will each pay taxes on:
a. whatever they receive from the partnership.
b. $50,000.
c. $100,000.
d. None of the above. The partnership itself will pay the taxes on the businesss profit.
Abraham has just purchased his first car. His bank, First State Bank, loaned him the
money to buy the car and has required him to purchase insurance to protect the car as
the collateral for the loan. Which basic types of coverage should Abraham buy to satisfy
the bank requirement and to protect himself from the risks of operating an automobile?
a. Collision coverage only.
b. Collision and comprehensive coverage only.
c. Collision, uninsured motorist, and comprehensive coverage.
d. Collision, uninsured motorist, comprehensive, and liability coverage.
Zeno, Inc. is considering relocating its manufacturing facility from Illinois to Mexico
City. The stakeholders in this decision might include:
a. Zeno’s shareholders.
b. customers.
c. the Illinois community in which Zeno operates.
d. All of the above.
More Americans law comes from which country?
a. Framce
b. England
c. Spain
d. Aztecs
A Tippee
a. knows the information he is providing is confidential
b. know it was from an insider.
c. must deal with information provided by an insider who expects a profit.
d. all of these answers are correct.
Wayne is renting an efficiency upstairs from Fields. Wayne decides to go to Europe for
four months and lets his friend, Charlie, live in his apartment while he is away, with the
understanding that Charlie will pay the rent. Wayne has:
a. assigned the apartment, but Wayne is still liable for the rent.
b. sublet the apartment, but Wayne is still liable for the rent.
c. assigned the apartment, but is not liable for any unpaid rent during Charlie’s
occupancy.
d. sublet the apartment, but is not liable for any unpaid rent during Charlie’s occupancy.
The title of a contract should be:
a. general, like “Memorandum of Agreement..
b. written like a sentence, with only the first letter capitalized.
c. short — no more than five words.
d. descriptive of the agreement, and typed in all capital letters.
Who establishes executive compensation?
a. The board of directors.
b. The shareholders.
c. The officers themselves.
d. An independent CPA firm.
Which of the following are alternatives in dealing with issues of ethics in advertising?
a. Try, in a general way, to minimize racism, sexism, and other exploitation.
b. Include, as part of the development process, a systematic, focused review of the
underlying messages contained in advertisements.
c. Refuse to create ads that are potentially demeaning, insensitive, or dangerous,
recognizing that such a stand may lead to a loss of clients.
d. All of the above are alternatives in dealing with issues of ethics in advertising.
Which of the following words could be registered as a trademark?
a. Crunchy peanut butter.
b. Low-fat peanut butter.
c. Green peas.
d. yStar peanuts.
Why do so many corporations incorporate in Delaware?
a. Delaware has laws that favor Management.
b. Delaware has an efficient court system with courts that on serve businesses.
c. It have a lot of precedent making the outcome of litigation more predictable.
d. All of these answers are true.
Tyron purchased a vacant lot and entered into a contract with BZ Inc. to construct a
shopping center on the site. Douglas heard about this contract and built a restaurant on
an adjoining piece of property because of the planned shopping center. Tyron was
unable to raise the necessary capital and was unable to perform the contract with BZ,
Inc. Douglas sued Tyron for breach of contract as a third party beneficiary. Douglas will
probably:
a. win as a third party creditor beneficiary.
b. win as a third party donee beneficiary.
c. lose as a third party incidental beneficiary.
d. lose as a third party creditor beneficiary.
The accounting firm of Gray & Co. did accounting work for both Regional Bank and
Carter Electronics. Without Carters knowledge or approval, Gray & Co. discussed
Carters financial problems with Regional Bank. Gray & Co.:
a. breached a legal obligation to keep all client information confidential.
b. breached a moral, but not a legal, obligation of confidentiality.
c. did not breach any obligations to its clients.
d. acted properly because it was protecting its client, Regional Bank, from possibly
making an unwise loan to Carter Electronics.
The primary source of federal power to regulate business is the:
a. Supremacy Clause.
b. Commerce Clause.
c. Contract Clause.
d. Privilege and Immunities Clause.
Sarah works for a company that has offered a promotion if she was willing to relocate.
Sarah accepted the position and prepared to move. She hired a common carrier “We
Move It to move her furniture. She entered into a written contract with “We Move It.
The agreement included a clause excusing “We Move It from any liability for loss or
damage, even if the loss or damage resulted from “We Move It’s negligent acts. Because
of “We Move It’s negligence, Sarah’s furniture was damaged. Sarah claims that “We
Move It is liable for the full cost of the damage. Is Sarah correct?
a. Yes, because common carriers cannot limit their liability.
b. No, common carriers can limit their liability.
c. Yes, because exculpatory clauses are illegal and never enforceable.
d. No. common carriers are never liable for negligence.
Which of the following transactions would be considered by the IRS to be a taxable sale
of assets? Changing the form of business from:
a. a corporation to an LLC.
b. a partnership to an LLC.
c. an LLC to a corporation.
d. All of the above.
An agent may not engage in inappropriate behavior that reflects badly on the principal.
This rule applies to conduct:
a. during working hours.
b. during off-duty time.
c. during both working hours and off-duty time.
d. only by public officials.
Foiler Manufacturing, a new corporation, estimates it may generate approximately 200
kilograms of hazardous waste each month. Discuss the EPA requirements it faces in
relation to this waste.
A dumping duty is imposed on other countries that do not properly recycle their waste
created when they manufacture certain products.
What are some of the advantages for a business to incorporate in Delaware?
Weste, Inc. decided to expand by building a $50 million manufacturing facility. The
expansion is not regulated or approved by the government. Nevertheless, Weste must
prepare an environmental impact statement.
A director violates the corporate opportunity doctrine if he or she competes with the
corporation, unless the disinterested directors approve of the director’s actions.
Tim wrote a negotiable note. Subsequently, Tim’s debts were discharged in bankruptcy.
If a holder in due course presents the note for payment, Tim does not have to pay.
Insiders must turn over to the corporation any profits they make from the
purchase and sale or sale and purchase of company securities made within a six-month
period.
In a bailment the one who delivers the goods is the bailee and the one receiving them is
the bailor.
Discrimination in the workplace on the basis of age is prohibited under Title VII of the
Civil Rights Act of 1964.
Some of the elements of a contract are agreement, consideration, legality, and capacity.
Contracts must begin with the word, “whereas in order to be legal.
There are two types of commercial paper: express and implied.
Fixtures are goods which are attached to real estate so they are not covered by article
( of the UCC.
Corporations have perpetual existence.
Rob agrees to act as an agent for Diane in selling her car. Diane has a duty of loyalty to
Rob.
Identify and explain at least four situations where a written contract is either necessary
or recommended.
Generally, the sale of leased property does not affect the lease but merely substitutes
one
landlord for another.
Typos are almost always detrimental to the validity of a contract because they cause the
contract to not reflect the true agreement of the parties.
Both the Justice Department and the Federal Trade Commission (FTC) have authority
to enforce the antitrust laws.