Which of the following can be the basis for an accountant’s liability under state law?
a. Contract law and negligence, but not criminal law.
b. Tort law, contract law, and criminal law.
c. Negligence, criminal law, and strict liability.
d. Intentional torts and negligence, but not contract law.
While driving his car five miles over the speed limit, Evan struck Darla, who was
jaywalking across the street. When the case came to trial, the jury determined that Evan
was 60 percent negligent and that Darla was 40 percent negligent. Darla’s injuries are
$10,000. If this accident occurred in a state following the comparative negligence
theory of recovery:
a. Darla will recover $10,000.
b. Darla will not recover anything.
c. Darla will recover $6,000.
d. Darla will recover $4,000.
The various forms of MNE include:
a. NASDAZ.
b. NFTRA.
c. EU.
d. Wholly owned subsidiaries.
The UCC excuses presentment for payment or acceptance if:
a. the person who is entitled to enforce the instrument cannot, with reasonable
diligence, present the instrument.
b. the maker or acceptor of the instrument has repudiated the obligation to pay, is dead,
or is in insolvency proceedings.
c. the drawer or indorser has waived the rights of presentment.
d. All of the above.
An agent acts for a(n) __________ principal when the agent appears to be acting on her
own behalf and the third person with whom she is dealing has no knowledge that she is
an agent.
a. partially disclosed
b. undisclosed
c. unauthorized
d. disclosed
The intermediate equal protection test:
a. does not require governmental action to bear a substantial relationship to an
important governmental objective.
b. eliminates the strong presumption of the constitutionality of legislation that exists
under the rational relationship test.
c. does not allow taking into legislative consideration the natural physical differences of
gender.
d. requires that men and women be treated exactly the same with regard to
governmental action.
The fixture test of purpose or use applies only if the item:
a. is affixed to the realty in some way.
b. can be removed without material injury to the realty.
c. Both (a) and (b).
d. is distinct from the realty but could be affixed to it.
On March 1, Tammy, a student, received a telephone call from Watterson, Inc. offering
her a job for one year beginning on June 15, after completion of the school year.
According to the personnel manager, she will have to move to California and be ready
to start work at 8:00 a.m. on June 15. Should Tammy ask for a letter confirming the
telephone conversation if she accepts the offer immediately?
a. Yes, because the job offer is a collateral promise.
b. Yes, because the job offer is covered by the parol evidence rule.
c. Yes, because the job offer is for longer than one year from March 1.
d. No, because the job offer is for one year from June 15.
Match each statement with the correct term below.
a. The duty that requires an agent to act in the principal’s affairs only as authorized by
the principal and to obey all reasonable instructions.
b. The requirement that an agent maintain and provide the principal with a true and
complete account of money or other property that the agent receives or expends on
behalf of the principal.
c. A consensual relationship authorizing one party to act for and on behalf of another
party.
d. A person authorized to act on another’s behalf.
e. The requirement that an agent act with reasonable care and skill in performing the
work for which she is employed.
f. Written, formal appointment of an agent.
g. The requirement that an agent use reasonable efforts to give the principal information
that is relevant to the affairs entrusted to her.
h. Person who agrees to do a particular job for another but who is not subject to the
other’s control.
i. A form of liability without fault in which the principal is held vicariously liable for
the agent’s unauthorized tort.
j. Authority that is either express or implied and that depends upon consent manifested
by the principal to the agent.
k. A principal of whom a third party has no knowledge, because he has no reason to
believe the agent is acting for a principal.
l. Corporation’s act of confirming a contract that was made by a promoter before the
corporation was formed.
m. Power that is based upon acts or conduct of the principal which manifests to a third
party that the agent has power and upon which the third party justifiably relies.
n. A principal that a third party knows exists but does not know who it is.
o. The confirmation or affirmance by one person of a prior unauthorized act performed
by another who is, or purports to be, his agent.
p. Power inferred from words or conduct that a principal manifests to an agent.
1) agency
2) agent
3) power of attorney
4) duty of obedience
5) duty of diligence
6) duty to inform
7) duty to account
8) independent contractor
9) implied authority
10) actual authority
11) apparent authority
12) respondeat superior
13) ratification
14) undisclosed principal
15) unidentified principal
16) adoption
The Federal Trade Commission Act allows the FTC to:
a. determine what constitutes deceptive advertising practices.
b. prohibit all advertising in certain professions.
c. require advertisers to contribute to a fund to reimburse injured consumers.
d. require the independent testing of consumer goods.
One of the fiduciary duties of directors is the duty not to compete with the corporation.
They may pursue their own business interest, but in doing so they may not:
a. use corporate resources.
b. hire away personnel for their own business.
c. use corporate facilities.
d. All of these are correct.
Richard writes a letter to Sarah authorizing her to sell his car and sends a copy of the
letter to Timothy, a prospective purchaser. The next day, Richard sends a letter to Sarah
revoking her authority, but he fails to notify Timothy. Sarah:
a. has actual authority to sell the car to Timothy.
b. has implied authority to sell the car to Timothy.
c. has apparent authority with respect to Timothy to sell the car.
d. is empowered under the doctrine of respondeat superior to negotiate the contract.
In order for there to be a violation of Section 2 of the Sherman Act, in addition to
monopoly power, the courts must find:
a. unfair conduct or abuse of power.
b. concerted action.
c. competitive behavior.
d. economic advantage.
A creditor may petition the court to judicially dissolve a corporation if he has an
unsatisfied judgment against the corporation and:
a. the corporation is insolvent.
b. the creditor will become insolvent if not paid.
c. the debt is over $5,000.
d. All of the above.
Chapter 3 of the Bankruptcy Code deals with:
a. the meetings of creditors.
b. the officers who administer the case.
c. the administrative powers of the officers who administer the case.
d. All of the above.
Roberts, Smith, and Thomas have been partners for twenty years. The partners,
however, are now collecting debts, converting assets to cash, paying creditors, and
distributing remaining assets to each partner. Roberts, Smith, and Thomas are engaged
in:
a. dissolution.
b. marshaling assets.
c. reformation.
d. winding up.
Identify the following trade symbols according to their type:
a. The Underwriter’s Laboratory Mark.
b. The apple used by Apple Computers.
c. The “GM” symbol that appears on General Motors’ automobiles.
d. The “A” symbol used by American Airlines.
e. The Muppets characters Miss Piggy and Kermit the Frog.
f. The union-made symbol.
ABC Partnership agrees to hire an “errand runner” 20 hours per week for the summer.
Alan, a partner, interviews a college student and decides to offer her the job. But she
says she needs a 40-hour-a-week job, so Alan agrees to make it 40 hours. What result?
a. ABC Partnership is not bound to hire her.
b. ABC Partnership is bound to pay her for 40 hours per week.
c. Alan is bound to pay her for 20 hours per week.
d. Alan has to pay her for 40 hours per week.
A(n) __________ is an intended beneficiary of a contract who receives the benefits of
the contract as a gift.
a. incidental beneficiary
b. intended beneficiary
c. assignor
d. donee beneficiary
Which of the following is NOT an example of co-ownership?
a. A joint tenancy.
b. A tenancy by the entireties.
c. A tenancy in common.
d. A lease between a landlord and a tenant.
An offer is effective as soon as it is dispatched.
Interpretative rules of administrative agencies are not automatically binding on the
courts.
Whether a transfer is by assignment or by negotiation, the transferee acquires the rights
the transferor had.
A case before a U.S. Court of Appeals is generally heard by all judges of the circuit
sitting en banc.
By law, bystanders are always required to help others in peril.
The World Bank established the Multilateral Investment Guarantee Agency to
encourage increased investment in developing nations.
A ‘short-form merger” requires shareholder approval of both corporations.
A written stop payment order is effective indefinitely.