The International Financial Reporting Standards (IFRSs) are used primarily by
companies operating within the United States.
The Statute of Frauds is a state statute that requires that certain types of contracts must
be in writing.
The foreseeability standard holds accountants liable to third parties only if the
accountant was aware of the identity of the third party.
A rejection is a withdrawal of an offer by the offeror that terminates the offer.
“Irreconcilable differences” is grounds for an at-fault divorce.
A partner’s vote count is based on the proportional size of his or her capital contribution
or share in the partnership’s profits.
Words that are descriptive but have no secondary meaning can be trademarked.
A general duty standard of the Occupational Safety and Health Act imposes on an
employer a duty to provide employment and a work environment that is free from
recognized hazards that are causing or are likely to cause death or serious physical harm
to its employees.
To bring a lawsuit, a plaintiff must have standing to sue.
Implied powers allow a corporation to exceed its express powers in order to accomplish
its corporate purpose.
The property of Chapter 13 estate consists of all nonexempt property of the debtor
before the case is closed.
Floating lien refers to a security interest in property that was possessed by the debtor
when the security agreement was executed.
There are exceptions to assigning the right to sue a contracted party legally.
In an output contract, the seller agrees to sell all of its production to a single buyer.
The duty of restoration is a rule that states that if a minor has transferred money,
property, or other valuables to the competent party before disaffirming the contract, that
party must place the minor in status quo.
A director may fulfill his duty of loyalty by usurping a corporate opportunity.
A licensing statute enacted to protect the public is called a regulatory licensing statute.
A check is drawn on a financial institution and is payable on demand.
The right to replevy is available to the seller if the buyer wrongfully rejects or revokes
acceptance of the goods, fails to make a payment when due, or repudiates the contract.
Future goods other than crops and unborn young are identified when the goods are
shipped, marked, or otherwise designated by the seller or lessor as the goods to which
the contract refers.
A check is accepted when it is certified by a bank.
Any lessee who rightfully rejects goods is entitled to reimbursement from the lessor for
reasonable expenses incurred.
The U.S. Constitution provides that the president may enter into treaties with foreign
governments without the consent of the Senate.
In deciding the motion for summary judgment, the judge cannot consider any facts
outside the pleadings.
Early English law courts were presided over by a Lord Chancellor.
Implied warranties of quality cannot be disclaimed.
A signature on a negotiable instrument identifies who is obligated to pay it.
There is no variation in common law of contracts from state to state.
In surety arrangements, the creditor should have exhausted all other remedies against
the principal debtor before seeking payment from the surety.
The UCC requires that negotiable instruments be either payable to order or payable to
bearer.
A speech is considered obscene when the work, taken as a whole, lacks serious literary,
artistic, political, or scientific value.
Nonprofit corporations are prohibited by law from distributing profits to their members,
directors, and officers.
Discharge of an instrument by payment or cancellation is a type of ________.
A) warranty liability
B) transfer warranty
C) personal defense
D) universal defense
Sandra, Ben, and Farah form an LLC. They designate the LLC as a manager-managed
LLC, and name Ben and a friend named Lily as managers. Sandra enters into a contract
to lease equipment on behalf of the LLC. Which of the following is true of the given
scenario?
A) The LLC is bound to the contract.
B) Ben and Lily are bound to the contract Sandra entered into.
C) Only Ben, as both member and manager, is bound to the contract entered into by
Sandra.
D) The LLC is not bound to the contract entered into by Sandra.
Mark Walton was involved in a car accident in which the airbag of his car failed to
deploy. He sued the car manufacturer for installing faulty airbags. But in the course of
the case being heard in court, the car company and Mark decided to settle the lawsuit
out of court. What important function of the law was served in this case?
A) promoting social justice
B) maximizing individual freedom
C) providing a basis for compromise
D) maintaining the status quo
Which of the following is true of the collective membership mark?
A) It identifies people who have met standards set by the group owning the mark.
B) It identifies the goods that are produced by the group owning the mark.
C) It identifies the works of art that are provided by the group owning the mark.
D) It identifies the service marks and the trademarks of the group owning the mark.
Luke offered to sell his farm to Kent at $75,000, an offer which Kent declined. A week
later, Luke offered to sell the farm for $65,000, stating that it was the final offer, it was
valid for one month, and that he would not alter it. Two days later, Kent replied by
saying that he was willing to pay $60,000 for the farm. A week after Luke received
Kent’s offer, Luke declined it. Ten days after that, Kent agreed to buy the farm for
$65,000, but Luke refused to sell the farm. Kent decided to sue Luke for a breach of
contract. The judge ruled in favor of Luke. Which one of the following is the reason for
the ruling in Luke’s favor?
A) Luke’s original offer of $75,000 is still valid, even though rejected.
B) Kent’s counteroffer of $60,000 had rendered the offer for $65,000 invalid.
C) Kent’s acceptance was past the set time period in the offer.
D) Kent acted in an incompetent manner with regards to the offer.
When an employee breaches a fixed-term employment contract by quitting before the
end of the term, the employer can recover damages for ________.
A) all expenses incurred in recruiting that employee
B) all amounts already paid to the employee under the contract
C) the amount equivalent to the employee’s remaining term as per the contract
D) the costs to hire a new employee plus any additional increase in salary paid
Which of the following best describes a fixture?
A) goods that are closely associated with a piece of real property
B) intangible properties that are created inside the premises of a real property
C) parts of a real property that is easily transferrable without substantial damage to the
property
D) goods that cannot be classified as personal property or real property
A person who has been authorized to sign a negotiable instrument on behalf of another
person is known as a(n) ________.
A) holder in due course
B) accommodation party
C) agent
D) principal
Which of the following is true of the UCITA?
A) It establishes a uniform set of rules that prohibit all forms of cybersquatting.
B) It defines which technologies should be used to create a legally binding signature in
cyberspace.
C) It aims at eliminating all domain names registered in bad faith.
D) It does not become law until a state’s legislature enacts it as a state statute.
Hartman, who has worked for Aratize, Inc. for 25 years, is retiring. Upon hearing the
news of his retirement, the president of Aratize announces a bonus of $250,000 to
Hartman for his exceptional services toward Aratize thus far. But upon retiring,
Hartman isn’t paid the bonus. Hartman decides to sue the president and Aratize to
recover the promised bonus. Which of the following is true of this case?
A) It will be enforceable in court because it is a gift promise.
B) It will not be enforceable in court because of past consideration.
C) It will not be enforceable because the president is not authorized to make such a
promise.
D) It will not be enforceable because it is an unlawful consideration.
Zen’s Choice, a chain of sports equipment stores, owns the real estate on which a
franchisee operates its franchise. Zen’s Choice’s charges a franchisee rent, which is
calculated as a percentage of monthly net sales. In this instance, the franchisee is paying
________ fees.
A) royalty
B) contingency
C) assessment
D) lease
Stella is a volunteer at her church during bingo night. At the end of the night, it is her
responsibility to take the evening’s profits and drop them in the night deposit box at the
local bank. She is given the leather and canvas case filled with money and she leaves
for the bank. On the way there, she decides to keep the money and drives to another
state. What crime has she committed?
A) extortion
B) burglary
C) embezzlement
D) larceny
The federal government’s Social Security program, which pays benefits to older
members of society but not to younger members of society, is lawful as examined by
a(n) ________ test.
A) rational basis
B) intermediate scrutiny
C) strict scrutiny
D) due process
My-Wear Inc. is an apparel retailer based in San Francisco. It operates through a
franchise named KL Apparels Ltd. in Santa Clara. After about six years of operation,
My-Wear Inc. cancelled the franchise with KL Apparels without any notification. The
franchise period specified in the contract has not expired and the franchisee had met all
standards stated by the franchisor. This constitutes a ________.
A) termination at will
B) termination for cause
C) contractual termination
D) suspension by franchisor
What does the American Rule for successive assignments provide?
A) The last assignment in time prevails, regardless of notice.
B) The first notified assignment prevails.
C) The first assignment in time prevails, regardless of notice.
D) Only notified assignments prevail.
A corporation is a(n) ________ corporation in the state in which it is incorporated.
A) offshore
B) domestic
C) alien
D) foreign
Which of the following statements is true of Section 32(a) of the Securities Exchange
Act of 1934?
A) This rule applies only to auditors.
B) Insider trading falls within the purview of this section.
C) A person guilty of violating Section 32(a) will be imprisoned regardless of his or her
knowledge of the regulation violated.
D) The SEC files criminal lawsuits against those willfully violated federal securities
laws.
A(n) ________ is an agreement whereby the parties agree to accept something different
in satisfaction of the original contract.
A) counteroffer
B) accord
C) promissory estoppel
D) mirror image acceptance
Which of the following statements is true of Section 18(a) of the Securities Exchange
Act of 1934?
A) A plaintiff can recover damages by filing a negligence case under Section 18(a).
B) A plaintiff in a Section 18(a) action must prove that they relied on the misleading
statement and that it affected the price of the security.
C) An accountant is liable even if he or she acted in good faith while making
misleading statements of material facts.
D) An accountant is liable even if the plaintiff was aware of the misleading statement
when the securities were sold.
The state of Idaho has a two-year statute of limitations for personal injury actions.
Graham was injured by Alice in a car accident on January 1, 20 If Graham wants to
bring a lawsuit against Alice on January 15, 2013, which of the following is most likely
to be the outcome?
A) Graham is allowed to sue Alice after appealing for an extension of the statute of
limitations.
B) Graham is not allowed to sue Alice, having lost his right to sue her.
C) Graham can sue Alice but will not receive damages.
D) Graham can sue Alice but is not entitled to a jury trial.
Which of the following describes backward vertical merger?
A) a vertical merger between two or more companies that compete in the same business
and geographical market
B) a vertical merger between two companies in similar fields whose sales do not
overlap
C) a vertical merger in which a supplier acquires a customer
D) a vertical merger in which a customer acquires a supplier
Sean is an accountant who is facing a civil lawsuit. The lawsuit has been filed by one of
his clients, Naturs, Inc. To recover punitive damages, Naturs should prove that
________.
A) Sean intentionally misrepresented a material fact
B) its accounting standards were not met by Sean
C) Sean mistakenly prepared an unaudited financial statement
D) it missed deadlines due to Sean’s failure to perform
Tom was hired to prepare and certify a registration statement for Blue Scales, Inc. The
Securities and Exchange Commission (SEC) found some omissions of material facts in
the registration statement. Which of the following statements is true of this scenario?
A) Tom cannot be held liable as the SEC is not a member of the limited class of
intended users of his statements.
B) Tom cannot be held liable as the SEC is not in privity of contract with him.
C) Tom can be held liable under Section 11(a) of the Securities Act of 1933 regardless
of his willfulness in making misstatements of facts.
D) Tom can avoid liability if he can show that he had reasonable grounds to believe that
the statements made were true.
Ellen, who has a safe driving record, purchases automobile insurance from an insurance
company. Which of the following is the accurate reason why Ellen would be disallowed
from assigning her rights to be insured to another driver?
A) The assignment would materially alter the risk and duties of the insurance company.
B) Claiming insurance is a future right and hence cannot be assigned.
C) Insurance is a personal service contract and hence cannot be assigned.
D) Personal contracts like insurance are assignable only with the agreement of all
parties involved in the contract.
Which of the following schools of jurisprudential thought is also known as Chicago
School?
A) the Historical School
B) the Natural Law School
C) the Law and Economics School
D) the Sociological School
Uploading copyrighted material to an unauthorized website by a non-copyright holder
would count as an act of copyright infringement under the ________.
A) Leahy-Smith America Invents Act
B) Berne Convention Act
C) Sonny Bono Copyright Term Extension Act
D) No Electronic Theft Act
The sole proprietor has ________ liability.
A) zero personal
B) limited organizational
C) complete organizational
D) unlimited personal
Which of the following moral theories lays emphasis on morality based on one’s moral
duties?
A) moral relativism
B) utilitarianism
C) Kantian ethics
D) ethical fundamentalism
The ________ Clause of the U.S. Constitution allows the government to take property
for “public use.”
A) Due Process
B) Just Compensation
C) Double Jeopardy
D) Ratification
Which of the following is a necessary prerequisite for legally claiming a reward?
A) A promise of completing the requested act is sufficient for a claimant to claim the
reward.
B) Knowledge of the reward before completing the requested act is necessary to claim
the reward.
C) The claimant can claim the reward even if he or she came to know of the reward
subsequent to completing the act.
D) The offeror cannot withdraw the reward once the offer has been placed in the public
domain.
The ________ is responsible for formulating policy decisions that affect the
management and operation of the corporation.
A) ombudsman
B) board of directors
C) shareholder
D) corporate officer
What are some of the criticisms about the the North American Free Trade Agreement?
Define the lessee’s right to cover and analyze its importance in contract law.
Compare and contrast an international branch office and an international subsidiary.
Explain the liabilities of individuals involved in the exchange of material nonpublic
information for personal benefits. Provide an example.
Explain surety arrangement with an example.
Discuss with an example how discrimination of a protected class other than race or
color is permitted.
Differentiate two-party and three-party secured transaction.
The state of Ambalin is home to the city that is considered to be the electronics capital
of the world as it hosts a number of electronic manufacturing companies. The state
legislature of Ambalin imposed a 150 percent tax on any electronic goods imported
from a foreign country and sold in Ambalin, but did not impose any tax on domestic
electronic goods sold in Ambalin. Discuss the implications of passing such a tax.
Analyze the jurisdiction of the U.S. Supreme Court.
How does the Federal Trade Commission regulate projections made by franchisors to
prospective franchisees?
Discuss briefly how the STOCK Act holds members of the Congress, government
officials, and judges liable to insider trading.
Explain gift causa mortis with an example.
Can encryption and its legal enforcement keep up with digital piracy?
If two or more firms act the same but no concerted action is shown, can they be held for
violation for Section 1 of the Sherman Act?
Jenna signs a promissory note to pay $1,000 to Adam. Adam cleverly raises the note to
$10,000 and negotiates the note to Ned. Ned indorses the note and negotiates it to
Mark. When Mark presents the note to Jenna, how much does she need to pay? Can
Mark collect any sum of the money from Ned? If yes, how much?
Hannah has to repay $4,678 to Ray. She draws a promissory note to that effect. How
does executing a promissory note help Hannah in this case? Explain the different parties
involved in it.
List the essential elements that constitute a valid contract.
Is the crashworthiness doctrine a reasonable practice to adopt by a court?
Discuss how the risks of loss in lease contracts are mandated under the Uniform
Commercial Code (UCC).
Explain median income test with an example.