The law establishes a test for determining whether a partnership has been formed. The
test includes which of the following?
a. An association of two or more persons.
b. Conducting a business not necessarily for profit.
c. That the partnership agreement is filed with the Secretary of State.
d. The sharing of gross returns.
Which of the following is correct with respect to an accountant’s working papers?
a. The client is held to be the owner of an accountant’s working papers.
b. An accountant must surrender his working papers to his client if the client so
requests.
c. An accountant may not surrender her working papers unless the client consents or a
court orders the disclosure.
d. All of these are correct.
Delivery alone is insufficient to negotiate an instrument when it is payable to:
a. order and the last indorsement is in blank.
b. cash and signed by the drawer.
c. bearer and is not indorsed.
d. the order of John Jones and is not indorsed.
Property may be classified as:
a. tangible and intangible.
b. real or personal.
c. physical and imaginary.
d. Both (a) and (b).
A form of strict liability applies to all except which of the following situations?
a. A lawnmower sold in a defective condition that injures its owner.
b. A fireworks factory that blows up and injures townspeople and their property.
c. Abnormally risky medical procedures.
d. A herd of goats that walk onto a neighbor’s property and trample and eat the
neighbor’s roses.
In order to be valid, a will must generally include all but which one of the following?
a. Signature of the testator.
b. A written document.
c. Signatures of witnesses.
d. Signature of the executor.
The intentional exercise of dominion or control over another’s personal property which
so seriously interferes with the other’s right of control as to justly require the payment
of full value for the property is:
a. trespass to personal property.
b. interference with economic interests.
c. conversion.
d. fraudulent misrepresentation.
Warranties of a person obtaining payment or acceptance of an unaccepted draft include:
a. the warrantor is a person entitled to enforce the draft.
b. the warrantor has no knowledge that the drawer’s signature is unauthorized.
c. the draft has not been altered.
d. All of the above.
Congress enacted what law to provide consumers who purchase a home with greater
and more timely information on the nature and costs of the settlement process?
a. RESPA.
b. CPSC.
c. OSHA.
d. FCCPA.
In __________ the goods are sold and delivered to the buyer with an option to return
them to the seller.
a. a bailment
b. a sale on approval
c. a sale or return
d. entrusting to a merchant
Rules for the distribution of property in a situation involving intestate succession:
a. do not apply to property held in joint tenancy.
b. apply where the testator has failed to name an administrator.
c. prevent disposition of property by a valid will.
d. have no application to real estate owned by the decedent.
In choosing the form in which to conduct business, if ease of formation is the primary
concern, the owners would choose a:
a. corporation.
b. limited liability partnership.
c. limited partnership.
d. general partnership.
Examples of trade dress include:
a. a union-made label in a dress.
b. the shape of a Coca-Cola bottle.
c. Internet domain names that distinguish the goods of one producer.
d. All of the above.
a. What warranties are given by an indorser who receives consideration for the transfer?
b. What warranties are given by a transferor by delivery without indorsement?
c. If a person has no liability on the instrument, does that mean he has no liability as a
result of the transaction involved? Explain.
The 1934 Securities Exchange Act requires registration of:
a. all regulated publicly held companies.
b. securities being issued initially.
c. statutory outsiders.
d. tippees.
If Jack contributed $1000 as a limited partner and signed a certificate, but the certificate
was filed in the wrong office, Jack:
a. will not be liable as a general partner if he quickly withdraws from the business and
renounces future profits.
b. is not a partner at all and may withdraw his contribution.
c. cannot avoid liability as a general partner under any circumstances.
d. may become a limited partner by giving constructive notice of the defective filing to
all potential business contacts by an advertisement in a publication of general
circulation.
Which of the following is NOT true about auctions?
a. The UCC provides that if an auction sale is advertised or announced in explicit terms
to be with reserve, the auctioneer may not withdraw the article put up for sale unless no
bid is made within a reasonable time.
b. Unless an auction is advertised as being without reserve, the sale is with reserve.
c. Whether an auction is with or without reserve, a bidder may retract his bid at any
time prior to acceptance by the auctioneer.
d. If the auctioneer knowingly receives a bid on behalf of the seller and notice has not
been given that the seller reserves the right to bid at the sale, the bidder to whom the
goods are sold can avoid the sale.
Contracts induced by threats of __________ are voidable, regardless of whether the
coerced party has committed an unlawful act.
a. civil prosecution
b. criminal prosecution
c. tortious conduct
d. a lawsuit to recover a debt
By holding a knife to his back, Ed compelled Sean to sign a contract advantageous to
Ed. This contract was entered under:
a. physical duress.
b. improper threats.
c. undue influence.
d. false representation.
A deed ordinarily contains all of the following except:
a. a description of the land.
b. a description of the consideration.
c. the signature of the grantor.
d. a description of the quantity of estate conveyed.
If the buyer inspects the goods before entering into the contract, then implied
warranties:
a. still apply to any defects.
b. will in no circumstances be applicable.
c. do not apply to defects that are apparent upon reasonable inspection.
d. None of the above.
All of the following would constitute a “fundamental change” to the corporation
EXCEPT:
a. an amendment to the articles of incorporation.
b. a merger.
c. a stock dividend.
d. selling off most of the business assets.
Which of the following carries with it no warranties or guarantees of title?
a. Warranty deed.
b. Quitclaim deed.
c. Special warranty deed.
d. All types of deeds carry a warranty of title.
Which of the following would be an unconditional promise or order to pay?
a. “I hereby acknowledge my debt to John Jones.”
b. “I hereby assign all my rights under this instrument to John Jones.”
c. “Pay to the order of bearer ten dollars.”
d. “IOU fifty dollars.”
Some states still recognize common law crimes.
Contracts are governed primarily by statutory law.
Barry buys a car from a dealer, which is sold to him “as is” and “with all faults.” The
next day, the engine blows up. Barry can sue the dealer for breach of the implied
warranty of fitness.
Discuss the concepts of ‘right’ and ‘duty’ under the law.
The state may appeal a verdict of “not guilty” if there is an error in the trial.
What is an electronic funds transfer? Why do banks like it? What provisions are in the
law to protect the customer who uses electronic funds transfer?
Two years of nonuse raises a presumption of abandonment and loss of a federally
protected trademark.
An accountant is generally held to be the owner of the working papers he uses in
performing an audit.
The antifraud provisions of the 1933 Act pertain to both unregistered and registered
securities.