The Sarbanes-Oxley Act of 2002 was enacted to prevent firms from engaging in
financial frauds.
A trust can be created to become effective after a trustor’s death.
Country-specific domain names can be purchased privately for commercial use.
Upon termination of a marriage, a spouse has no rights on the inheritances and gifts
received during the marriage.
Oral modification of a contract is not enforceable if the parties agree that any
modification of the sales or lease contract must be signed in writing.
Universal defenses can be raised only against ordinary holders and not holders in due
course to deny the payment of negotiable instruments.
In both shipment and destination contracts, the risk of loss is on the seller during
transportation.
An employer can discharge illegal strikers, who then have no rights to reinstatement.
Strict liability can be disclaimed.
It is illegal for a contract to have more than one condition to trigger or excuse
performance.
Marks are registered with the U.S. Copyright Office in Washington, DC.
A contracting party’s legal obligation to perform the duties specified in the contract can
be discharged by the operations of law.
The disassociation of a member from a term LLC before the expiration of the specified
term is wrongful.
Scienter arises when a person unintentionally defrauds an innocent party.
The Sarbanes-Oxley Act requires public companies to make personal loans to their
directors.
In the event of a tie decision between the Supreme Court justices, the lower court
decision is kept pending.
Commercial paper held by a holder in due course is virtually as good as money.
Under the common law, accountants may be held liable by their clients for fraud.
The Uniform Franchise Offering Circular (UFOC) satisfies both state regulations and
the FTC.
A restricted indorsement contains the signature of an indorser and specifies a person
(indorsee) to whom the indorser intends the instrument to be payable.
If the offeree uses an unauthorized means of communication, despite a stipulation of
express authorization, to transmit the acceptance, the acceptance is not effective.
The assortment of goods to a sales contract can be left as an open term.
Labeling someone an independent contractor is only one factor in determining whether
independent contractor status exists.
Chapter 13 bankruptcy does not require debtors to pay some of their future income to
pay off prepetition debts.
The doctrine of strict liability holds that any activity that can place the public at risk of
injury can be prevented if reasonable care is taken.
Principals cannot avoid liability for inherently dangerous activities that they assign to
independent contractors.
Rescission and restitution restore the parties to the positions they occupied prior to the
contract.
Plaintiffs must prove that the accountants behaved intentionally or recklessly in a
lawsuit based on Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934.
While measuring economic injury, the measure of damages is the sum of the value of
the property as represented and the actual value of the property.
Companies that provide businesses and individuals with Internet access are responsible
for the content transmitted over their networks.
A mortgage refers to an arrangement where an owner of real property borrows money
from a lender and pledges the real property as collateral to secure the repayment of the
loan.
Litigations are not possible under the objective rule if a person refuses to return the
engagement ring.
A postdated check must be accompanied by a ________.
A) separate written notice to the bank
B) verbal request
C) proof of identification of all parties
D) written permission from the judiciary
Which of the following statements best describes a foreign corporation?
A) It is a corporation with incorporations in multiple states.
B) It is a corporation in the state in which it is incorporated.
C) It is a corporation in states other than the one in which it is incorporated.
D) It is a corporation in the United States which has been incorporated in another
country.
Judicial dissolution of a corporation can be instituted by the attorney general of the state
of incorporation if the corporation ________.
A) procured its articles of incorporation through fraud
B) did not pay its franchise fee
C) failed to file an annual report
D) failed for 60 days to maintain a registered agent in the state
How is the doctrine of unconscionability related to public policy?
A) The doctrine of unconscionability is derived from public policy.
B) All contracts contrary to public policy are considered unconscionable.
C) Both are used to save a contracting party from a bad bargain.
D) Both are very distinctly defined by law.
A formal entrance into a contract between a client and an accountant is known as an
________.
A) abatement
B) arraignment
C) easement
D) engagement
Which of the following statements best describes the Restatement of the Law of
Contracts?
A) It is the supreme legal authority for contract law.
B) It is a law which has been adopted, at least in part, by every state.
C) It is a compilation of contract law principles, as agreed upon by its drafters.
D) It is a compilation of law pertaining exclusively to the Uniform Commercial Code.
Which of the following is true of workers’ compensation?
A) Families of workers cannot claim workers’ compensation despite the death of the
worker.
B) Workers’ compensation is only awarded for injuries resulting from the job.
C) The claim for workers’ compensation must be filed with the employer.
D) Workers’ compensation is a fixed amount throughout the country.
Which of the following is an apparent disadvantage of utilitarianism?
A) It does not allow people to have subjective notions of right and wrong.
B) It treats morality as if it were an impersonal mathematical calculation.
C) It puts too much emphasis on one book or theory.
D) It is based on moral duties derived from universal rules.
A(n) ________ hears appeals from trial courts.
A) small claims court
B) court of record
C) inferior trial court
D) intermediate appellate court
Alan owns 90 percent of the shares of Whitesoft, Inc. He wrongfully uses his
dominance to force the company to spend money on ventures that benefit him alone.
When sued by other shareholders, Alan defends by arguing that Whitesoft as a whole is
liable, but he was not personally liable as he was a mere shareholder of the company.
Which of the following doctrines is the court, presiding over this case, likely to adopt in
order to enforce justice?
A) attractive nuisance doctrine
B) crashworthiness doctrine
C) transferred intent doctrine
D) alter ego doctrine
Andrew contracts Goldflour Breads to purchase 10 pounds of flour at $4 per pound.
The contract states that delivery is to occur on July On this date, the market price of
flour is $6 per pound. Goldflour Breads is unable to make the delivery on July 1. Apart
from incidental and consequential damages, less expenses saved, the damages Andrew
can recover from Goldflour Breads is ________.
A) $20
B) $10
C) $4
D) $40
Which of the following is one of the purposes of the Dodd-Frank Wall Street Reform
and Consumer Protection Act?
A) monitoring the legitimacy of consumer and commercial wire transfers
B) establishing the reporting requirements for financial transactions, including
off-balance-sheet transactions
C) regulating previously unregulated financial products and institutions
D) overseeing, inspecting, and disciplining accounting firms in their roles as auditors of
public companies
A(n) ________ fund is a private investment company that invests in a wide range of
risky investments.
A) sector
B) hedge
C) mutual
D) index
All states have adopted the Revised Model Business Corporation Act (RMBCA).
According to ________, keeping a promise to abide by a contract is a moral duty even
if that contract turns out to be detrimental to the obligated party.
A) utilitarianism
B) Kantian ethics
C) Rawls’s social justice theory
D) moral relativism
Which of the following is an intentional tort?
A) breach of duty of care
B) defect in product manufacture
C) disparagement
D) negligence
Philip and Deborah form an LLC. Philip contributes $50,000 capital, and Deborah
contributes $75,000 capital. They do not have an agreement as to how profits are to be
shared. If the LLC makes $100,000 profit in its first year, how will the profit be divided
among the members?
A) Philip gets $30,000, and Deborah gets $70,000.
B) Philip gets $50,000, and Deborah gets $50,000.
C) Philip gets $25,000, and Deborah gets $75,000.
D) Philip gets $35,000, and Deborah gets $65,000.
Which of the following statements is true of the executive branch of the federal
government?
A) It provides for the election of the president based on popularity.
B) It provides for the election of the president who is selected by the Electoral College.
C) It provides for the appointment of representatives of the Electoral College who are
selected by the citizens of the state.
D) It provides for the establishment of the U.S. Supreme Court and the interpretation of
the U.S. Constitution and federal law.
Which of the following is considered real property under Statute of Frauds?
A) a fixture permanently affixed to a building
B) fifty-one percent partnership in a firm
C) a club membership
D) diamond jewelry
Which of the following is true of employment discriminations defined under Title VII?
A) Disparate-treatment discrimination can be proven through statistical data about an
employer’s employment practices.
B) Disparate-impact discrimination occurs when an employer adopts a work rule that is
neutral on its face but is shown to cause an adverse impact on a protected class.
C) Disparate-treatment discrimination occurs when an employer discriminates against
an individual of a protected class.
D) Sexual harassment and refusal to hire physically challenged employees are
illustrations of disparate-impact discrimination.
Which of the following opinions is necessary for a company to avoid unfavorable
repercussions?
A) an adverse opinion
B) a qualified opinion
C) a disclaimer of opinion
D) an unqualified opinion
On the judicial side, Delaware has a special court that hears and decides business cases
known as the ________.
A) court of arbitration
B) court of chancery
C) court of record
D) court of inquiry
Which of the following describes physical duress?
A) physically damaging the contract documents
B) signing a contract without the knowledge that it represents fraudulent information
C) threatening to physically harm someone if he or she does not sign a contract
D) persuading a person to rescind a valid contract by misrepresenting the facts
________ is the largest trading partner of the United States.
A) The United Kingdom
B) Canada
C) Russia
D) Mexico
________ is a moral theory with origins in the works of Jeremy Bentham and John
Stuart.
A) Ethical fundamentalism
B) Utilitarianism
C) Ethical relativism
D) Kantian ethics
________ refers to a contract provision that designates a certain court to hear any
dispute concerning nonperformance of the contract.
A) No-contest clause
B) Choice of law clause
C) Forum-selection clause
D) Arbitration clause
________ refer to the formal documents that must be filed at the secretary of state’s
office of the state of organization of an LLC to form the LLC.
A) Operating agreements
B) Certificates of interest
C) Articles of organization
D) Articles of amendment
Which of the following is an example of a new top-level domain name?
A) www.thegovernment.arizona
B) www.education.com
C) www.doctors.in
D) www.writers.org
Which of the following classifications of contracts is based on formation?
A) express contracts
B) valid contracts
C) unenforceable contracts
D) executory contracts
Which of the following is a major criticism of corporate citizenship theory?
A) The laws that guarantee minimum safety standards are difficult to establish.
B) The conflicting interests of different people related to a business are difficult to
harmonize.
C) The focus of business is only on maximizing the wealth of shareholders.
D) The duty of a corporation to do good to the society cannot be expanded beyond
certain limits.
Kimlon Informatics has to recover $5,000 from a client for its services. The recovery
period is 100 days but Kimlon needs the money immediately. It sells the right of
collecting money from its client to Quikcollect, a collection agency. Here, Kimlon
Informatics is the ________.
A) obligor
B) obligee
C) subassignee
D) assignee
Which of the following is true of a proxy contest?
A) It involves insurgent shareholders challenging incumbent directors.
B) It forbids solicitation of proxies by the parties involved in such a contest.
C) It requires incumbent directors to replace insurgent directors of the board.
D) It prevents shareholders from opposing actions taken by the board of incumbent
directors.
Mike and Ike agreed orally that Mike would tutor Ike in geology for $10 per hour for
three hours. After Mike has done the three hours of tutoring, but before Ike pays him,
this contract is ________.
A) executed
B) implied-in-fact
C) executory
D) performed
Which of the following sales would be covered by Article 2 of the UCC?
A) the sale of intangible goods
B) the sale of tangible goods
C) the sale of real estate
D) the sale of stocks