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The unfair advantage theory is intended to prevent wealthy companies from
overwhelming the competition in a given market.
Any state or local law that unduly burdens foreign commerce is considered to be in
violation of the Foreign Commerce Clause.
In general jurisdiction trial courts, the testimony and evidence at trial are recorded and
stored for future reference.
If a woman is informed of her husband being run over by a bus the previous night, she
can recover damages for negligent infliction of emotional distress.
Gifts that a debtor is entitled to receive within 180 days after the petition is filed are
part of the bankruptcy estate.
The CAN-SPAM Act does not end spam but instead approves businesses to use spam as
long as they do not lie.
The World Trade Organization (WTO) was created as a successor to the General
Agreement on Tariffs and Trade (GATT).
The U.S. Constitution divides the power to regulate foreign affairs equally between the
federal and state governments.
The compensation provided by the government for its exercise of the power of eminent
domain is final and cannot be disputed further.
Limited liability companies are created by federal law.
A third party who sues to recover on a partnership contract need not name all the
general partners in the lawsuit.
Shareholders are owners of a corporation who elect the board of directors and vote on
fundamental changes in the corporation.
In a dilution lawsuit, the plaintiff must show proof of actual harm in order to win the
lawsuit.
Probate is defined as the verification of a company's books and records by a certified
accountant.
The work-related test puts liability on the agent if the agent commits an intentional tort
within a work-related time and space.
The offeror cannot be found liable for the crime of bribery if the person to whom the
bribe is offered rejects the bribe.
If the accused cannot afford a private defense lawyer, the government will provide one
free of charge.
In a manager-managed LLC, amending the articles of organization cannot be delegated
to the managers.
An ethically wrong state or condition can still be legal.
A utility patent is a patent that may be obtained for the ornamental nonfunctional design
of an item.
Provisions of federal law are valid as long as they do not conflict with any state law.
A trial is conducted with a jury only when the defendant requests a jury trial.
The shareholders of a corporation act as agents of the corporation.
The NLRB oversees union elections and prevents employers and unions from engaging
in illegal and unfair labor practices.
A person with voidable title to goods can transfer title to a good faith purchaser for
value.
The United Nations (UN) secretary-general may refer matters that threaten international
peace and security to the Security Council and use his or her office to help solve
international disputes.
Employees are required to purchase workers' compensation insurance from private
insurance companies or state funds.
Section 406 of the Sarbanes-Oxley Act requires a public company to disclose whether it
has adopted a code of ethics for senior financial officers.
Wages, hours, and other terms and conditions of employment are permissive subjects of
collective bargaining.
Appeals from the Court of International Trade are heard by the Court of Appeals for the
Federal Circuit.
An affirmative-action plan provides that certain job preferences will be given to
members of minority racial and ethnic groups, females, and other protected-class
applicants when making employment decisions.
A manufacturer can be held liable for deceptive labeling or packaging under the Health
Care Reform Act.
Group boycotts can be either a per se violation or rule of reason violation.
Contracts for the provision of services are not covered by Article 2 of the UCC.
Which of the following refers to an agreement that substitutes a new party for one of
the original contracting parties and relieves the existing party of liability on the
contract?
A) novation
B) substituted contract
C) mutual rescission
D) accord
Steve Templeton, the CEO of Rolland Motor Company, is contemplating the shutdown
of a plant in Kantron. The plant has been unprofitable for some time now, and there is
increasing pressure from shareholders to shut it down so as to balance the loss being
incurred by the shareholders. But closing the plant would be a blow to the employees as
they will lose their jobs, and the local suppliers will lose a major buyer. There is also
fear that the sudden closing of the plant will have an adverse effect on the community
of Kantron, as the plant is one of the main sources of employment for the locals. Steve
Templeton considered all these factors before making a decision on the fate of the plant.
If Steve Templeton decides not to close the plant in Kantron, what business social
responsibility will Steve Templeton be achieving?
A) moral minimum
B) corporate citizenship
C) maximizing profits
D) stakeholder interest
A member of the board of directors who is also an officer of the corporation is known
as a(n) ________.
A) inside director
B) ombudsman
C) registered agent
D) shareholder
An employer pays higher wages to Shellywho has worked with the company for six
yearsthan Samuel, who holds a similar position to Shelly and performs the same
functions as her, and has worked with the company for only five and a half years.
Which of the following is true of this case, assuming that the employer recognizes
seniority in its compensation system?
A) The employer has violated the Fair Employment Practices Act.
B) The employer is liable for disparate-treatment discrimination.
C) The employer is liable for disparate-impact discrimination.
D) The employer has not violated the Equal Pay Act.
________ 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 would violate the Double Jeopardy Clause?
A) The government reopens a case after new incriminating evidence is found against an
acquitted person.
B) A person is tried for a case similar to a case from which he was acquitted earlier.
C) A case reaches a hung jury in court and the government reopens the case with a new
jury.
D) The criminal act violates more than one jurisdiction and each jurisdiction tries the
accused in turn.
The termination of an agency contract in violation of the terms of the agency contract is
referred to as ________.
A) termination by an unusual change in circumstances
B) termination by impossibility of performance
C) termination by operation of law
D) wrongful termination
________ is a rule that says that an accountant is liable only for negligence to third
parties who are in privity of contract or in a privity-like relationship with the
accountant.
A) The foreseeability standard
B) The Ultramares doctrine
C) The due diligence defense
D) Section 552 of the Restatement (Second) of Torts
Sue, a resident of the New York state, was visiting her aunt in Iowa. While there, her car
was hit by a drunken driver named Jerry, a resident of Iowa. Sue was injured in that
accident. Which of the following actions can Sue take in this scenario?
A) Sue can sue Jerry and bring the case to Iowa state court, provided that the dollar
amount of the controversy exceeds $75,000.
B) Sue can file a case against Jerry in the New York state court, as she is a resident of
that state.
C) Sue can file a case against Jerry only in the Iowa state court, as this is a matter that
involves state negligence law.
D) Sue can sue Jerry and bring the case to Iowa federal court, as this is a case that
involves diversity of citizenship.
Sam Muller and Toby Richardson form an LLC in the state of Delaware. In the articles
of organization, they specify the duration of the LLC as 25 years from the date of filing
the articles of organization. Which of the following is true in this context?
A) The LLC is invalid as it does not specify a date of termination.
B) The LLC may be dissolved at will any time after 25 years from the date of filing the
articles of organization.
C) Muller and Richardson have formed a term LLC.
D) Muller and Richardson have formed an at-will LLC.
Which of the following is true of a general partnership?
A) A business must generate a profit in order to qualify as a general partnership.
B) The general partners need not be the co-owners of the business.
C) A general partnership may be formed with little or no formality.
D) Charity organizations and schools are usually formed as general partnerships.
In which of the following cases of consumer safety violations will the U.S. Department
of Agriculture be required to take action?
A) A new drug was released into the market without adequate testing and this lead to
adverse side effects among users.
B) A brand of soft toys for infants was produced with low grade foam and fabrics that
are harmful for children when ingested.
C) A batch of sausages and cold cuts from a particular vendor was found to have high
levels of salmonella and other pathogenic organisms.
D) A fleet of cars released into the market by a famous company was found to have a
defective braking system which could prove fatal for owners.
In the context of copyrighted material, which of the following statements accurately
describes the fair use doctrine?
A) It stipulates the time period for which a copyright holder can retain his copyright.
B) It guides the U.S. Copyright Office in determining what works are copyrightable.
C) It permits the use of copyrighted material by someone other than the copyright
holder for a statutorily-prescribed fee.
D) It permits certain limited use of copyrighted material by someone other than the
copyright holder without the permission of the copyright holder.
Sources of thermal pollution are subject to the provisions of the Clean Water Act and
the regulations adopted by the EPA.
Interests or instruments that are expressly mentioned in securities acts are known as
________.
A) common securities
B) implicit securities
C) investment contracts
D) statutorily defined securities
________ is a point along a chain of events caused by a negligent party after which this
party is no longer legally responsible for the consequences of his or her actions.
A) Causation in fact
B) The point of reason
C) The point of appropriation
D) Proximate cause
A ________ is a right of possession that returns to the grantor after the expiration of a
limited or contingent estate.
A) reversion
B) remainder
C) quiet title action
D) nonconforming use
Which of the following criteria must be satisfied for a corporation to be treated as an S
corporation?
A) The corporation's shareholders must be other corporations or partnerships.
B) The corporation's shareholders must be citizens or residents of the United States.
C) The corporation must have more than 100 shareholders.
D) The corporation must have more than one class of stock.
Monica is an accountant with Mildred & Lane Inc., and she has recently been asked to
visit Maine Manufacturers to survey their financial records, assess their compliance
with federal and state laws, and provide an opinion reflecting the state of the company's
financial records. Monica's assessment of the financial records of Maine Manufacturers
is called a(n) ________.
A) probate
B) audit
C) arraignment
D) easement
If the EEOC chooses not to bring suit, it issues a(n) ________ to the complainant.
A) affirmative defense
B) right to sue letter
C) filing date
D) document of claim
A ________ is a form of co-ownership of real property that can be used only by married
couples.
A) cooperative
B) tenancy in common
C) joint tenancy
D) tenancy by the entirety
According to the mirror image rule, which of the following is true of additional terms
being added in an acceptance?
A) They are considered to be counteroffers.
B) They can be added when the sale is between a merchant and a non-merchant.
C) They can be added to the contract without the consent of the offeror.
D) They are considered to constitute acceptance.
________ is a rule that limits the liability of an accountant or other securities
professional to his or her personal degree of fault.
A) Privity of contract
B) The due diligence defense
C) Proportionate liability
D) The Ultramares doctrine
________ is defined as the substantial likelihood that a person either committed or is
about to commit a crime.
A) Preponderance of the evidence
B) Reasonable doubt
C) Probable cause
D) Reasonable suspicion
The National Environmental Policy Act (NEPA) is a federal statute that mandates that
the federal government must ________.
A) consider focusing on air and water pollution to the exclusion of other sources of
pollution, as these two modes of pollution have the greatest impact on human lives
B) implement a complete ban on the commercial usage of the two hundred toxic
substances identified as being harmful and polluting
C) implement a zero tolerance policy for all business activities that discharge waste
products into water bodies
D) consider the adverse impact a federal government action would have on the
environment before the action is implemented
Workers' compensation is a(n) ________ remedy.
A) exclusive
B) cumulative
C) provisional
D) equitable
Price fixing is a ________ violation of Section 1 of the Sherman Act.
A) reasonable
B) per se
C) justifiable
D) permissible
The ________ Clause of the Fifth Amendment to the U.S. Constitution allows the
government to take private property for public use.
A) Takings
B) Just Compensation
C) Double Jeopardy
D) Ratification
Classical Hindu law is based on ________.
A) civil codes
B) court decisions
C) the works of private scholars
D) canons collectively called riba
Which of the following is the implied default title conveyed in the sale of real estate?
A) life estate
B) servient estate
C) fee simple absolute
D) fee simple defeasible
Which of the following statements is true of the plaintiff's case?
A) The plaintiff's attorney examines the witnesses during cross-examination.
B) The defendant's attorney examines the witnesses during re-direct examination.
C) The defendant's attorney can ask questions only about the subjects that were brought
up during the direct examination.
D) Documents and other evidence have to be introduced before the first witness is
subject to direct examination.
Which of the following is the most favorable opinion an auditor can give a company
following an audit?
A) an unqualified opinion
B) a disclaimer of opinion
C) an adverse opinion
D) a qualified opinion
Which of the following consumer products comes under the purview of the Consumer
Product Safety Commission (CPSC)?
A) aircrafts
B) motor vehicles
C) firearms
D) children's toys
A(n) ________ is an unincorporated business entity that combines the most favorable
attributes of general partnerships, limited partnerships, and corporations.
________ is a power that permits states and local governments to enact laws to protect
or promote the public health, safety, morals, and general welfare.
________ is a defense to a charge of monopolizing which recognizes that a small
market can support only one competitor, such as a small-town newspaper.
What are the steps a prospective franchisee must take in order to acquire a franchise?
What properties are generally licensed by franchisors?
How is Social Security awarded in the United States?
Under the ________ Act, employees must make contributions (i.e., pay taxes) into the
Social Security fund.
Explain the nature and enforcement of national ambient air quality standards (NAAQS).
How does a company sell its shares to the public for the first time? Explain the contents
of a registration statement.
Explain the priority of law in the United States.
The ________ theory of social responsibility states that a corporation must consider the
effects its actions have on persons other than its shareholders.
What are the three statutory defenses under the Robinson-Patman Act for price
discrimination?
The ________ is an amendment to Title VII of the Civil Rights Act of 1964 that forbids
employment discrimination because of pregnancy, childbirth, or related medical
conditions.
A party who employs another person to act on his or her behalf is known as a(n)
________.
False statements that appear in a letter, newspaper, magazine, book, photograph, movie
or video are ________.
A(n) ________ is a partnership created for a fixed duration.
