The Sarbanes-Oxley Act officially applies only to a ________ corporation.
A) close
B) nonprofit
C) public
D) noncommercial
Which of the following is a criticism of stakeholder interest theory?
A) The duty of a corporation to do good to the society cannot be expanded beyond a
certain limit.
B) The conflicting interests of different people related to a business are difficult to
harmonize.
C) The focus of a business is only on maximizing the wealth of its shareholders.
D) It is difficult to establish laws that guarantee minimum safety standards.
Which of the following statements is true of the generally accepted accounting
principles (GAAPs)?
A) They are used by auditors as a guide for their nonaudit services only.
B) They are the accepted form of accounting principles around the world.
C) They cannot be modified once established by the American Institute of Certified
Public Accountants.
D) They set rules for how corporations must set forth their accounts on their financial
statements.
The ________ imposes liability under Section 10(b) and Rule 10b-5 on an outsider who
misappropriates information about a company, in violation of his or her fiduciary duty,
and then trades in the securities of that company.
A) Insider Trading Sanctions Act
B) Sarbanes-Oxley Act
C) tort of appropriation
D) misappropriation theory
A ________ protects the functionality of an invention.
A) hallmark
B) design patent
C) utility patent
D) wordmark
Which of the following is prohibited under the Clean Water Act?
A) inhabitation on inland areas in the vicinity of wetlands and marshes
B) chemical treatment of wastes to reduce toxicity before discharge into wetlands
C) construction of residences by filling qualified wetlands
D) creation of artificial lakes and waterways for recreation
As changed in the 2005 Act, which of the following are the first unsecured claims to be
paid?
A) claims for contributions to employee benefit plans based on services performed
within 180 days immediately preceding the filing of the petition
B) claims for unpaid income and gross receipt taxes owed to governments
C) claims for cash deposited by a consumer with the debtor prior to the filing of
bankruptcy petition
D) claims for domestic support owed to the spouse, former spouse, or child of the
debtor
________ is a situation in which the creditor does not have to file a financing statement
or take possession of the goods to perfect his or her security interest.
A) Perfection by possession of collateral
B) Perfection by attachment
C) Perfection by claim
D) Perfection without statement
In order to claim damages for negligence per se, the plaintiff has to prove that
________.
A) the defendant was in exclusive control of the situation
B) the plaintiff was within a class of persons meant to be protected by a violated statute
C) the defendant made a false representation of material fact
D) the plaintiff was affected by malicious statements made by the defendant about
his/her character
Martin borrows $15,000 from Tom, in the form of a check, and signs a promissory note,
promising to pay Tom this amount plus 10 percent interest in one year. Tom indorses
the note and negotiates it to Fronston. Fronston indorses the note and negotiates it to
Liza. Liza presents the note to Martin for payment when the note is due. Martin refuses
to pay the note. Who is secondarily liable to pay Liza?
A) Tom
B) Frontston
C) all liabilities lie with Martin
D) the bank that issued the check to Tom
Which of the following is true about the ratification of a contract by a minor?
A) A minor can only ratify a contract after reaching the age of majority.
B) A minor cannot ratify a contract that falls under the necessaries of life doctrine.
C) A minor can ratify a contract during the period of minority if he or she so wishes.
D) A minor can ratify a contract under the guidance of a parent or legal guardian.
How long should a general partnership have existed for it to be in writing under the
Statute of Frauds?
A) six months
B) 180 days
C) 10 weeks
D) one year
Which of the following best describes a quiet title action?
A) a lawsuit to determine the rightful owner of a disputed property and his or her rights
B) a lawsuit to enforce the right to survivorship to the holder of the title deed
C) a lawsuit asking for the release of the details of a separate property from a couple
D) a lawsuit to obtain reimbursement for losses caused by undiscovered defects in title
The plaintiff in a product liability lawsuit has suffered $100,000 worth of damages from
an automobile accident. A defect in manufacture of the plaintiff’s vehicle is found to be
35 percent responsible for the accident, while the plaintiff’s own negligence is 65
percent responsible. Under the doctrine of partial comparative negligence, how much
would the defendant”the manufacturer of the vehicle”have to pay the plaintiff in
damages?
A) $60,000
B) $40,000
C) $100,000
D) The defendant would not have to pay any amount in damages.
Among the parties to a contract, the ________ is the debtor.
A) obligee
B) obligor
C) assignor
D) assignee
Which of the following statements is true of a sole proprietorship?
A) A business operated under sole proprietorship cannot be transferred.
B) Large businesses cannot be operated under sole proprietorship.
C) A business operated under sole proprietorship should be owned by one or more
people of the same family.
D) Creditors can recover claims against the business from the sole proprietor’s personal
assets.
Instaworks, Inc. wants to acquire IOK Corp. Instaworks makes a tender offer to the
shareholders of IOK to acquire their shares of IOK without the permission of the latter
corporation’s board of directors. This is an example of a ________.
A) sale of assets
B) share exchange
C) merger
D) hostile tender offer
A derivative action is a(n) ________.
A) lawsuit that a shareholder brings against an offending party on behalf of a
corporation
B) inquiry that the board of directors launches in order to analyze the ethical standards
of the corporation
C) review that officers of the corporation conduct to test the skill sets of their
subordinates
D) audit conducted by registered agents to examine the financial health of the
corporation
Which of the following acts replaces joint and several liability with proportionate
liability?
A) the Securities Exchange Act of 1934
B) the Private Securities Litigation Reform Act of 1995
C) the Tax Reform Act of 1976
D) the Sarbanes-Oxley Act of 2002
According to the objective theory of contracts, the intent to enter into an express or
implied-in-fact contract is judged by the ________.
A) reasonable person standard
B) Supremacy Clause
C) doctrine of equity
D) common law of contracts
________ refer to written questions submitted by one party to a lawsuit to another
party.
A) Depositions
B) Rejoinders
C) Interrogatories
D) Summons
In a delegation, an obligor who transfers his or her duty is called a(n) ________.
A) obligee
B) assignee
C) delegator
D) delegatee
A contract in which both parties are mistaken about the value of the object of a contract
is considered ________.
A) unenforceable
B) unconscionable
C) nonrescindable
D) void
A ________ is a product formula, pattern, design, compilation of data, customer list, or
other covert business information.
A) copyright
B) patent
C) trade secret
D) trademark
A(n) ________ is an increase in the value of personal property because it is added to or
improved by natural or manufactured means.
A) arraignment
B) accession
C) lien
D) bailment
Sinbad Cola, a soft drink manufacturer, recently opened a plant in Buron. The wastages
from the plant were dumped in the Buron Sea, situated a mile away from the plant.
Dumping of wastes in the sea resulted in water pollution, which negatively affected the
Buron fishing business, and also resulted in groundwater contamination. Sinbad Cola
compensated by bringing contamination levels down with additional filters, and paying
damages to the local fisheries. Which theory of business social responsibility did
Sinbad Cola meet when they compensated for their harmful wastage disposal methods?
A) moral minimum
B) stakeholder interest
C) corporate citizenship
D) maximizing profits
Windsor, the owner of Windsor’s Sandwiches, contacts a new supplier Gary. He tells
Gary that he will pay him $375 if Gary delivers 20 pounds of cheese. Gary promises to
make the delivery as requested by Windsor. This creates a ________ contract between
them.
A) unilateral
B) bilateral
C) implied-in-law
D) executory
A security that is posted for the repayment of a promissory note is known as a(n)
________.
A) collateral
B) mortgage
C) deposit
D) installment
A(n) ________ provides for the reduction of a debtor’s debts.
A) extension
B) liquidation
C) limitation
D) composition
A(n) ________ is a document that modifies an insurance policy and becomes part of the
insurance policy.
A) endorsement
B) easement
C) injunction
D) convention
Mary, Harold, Harvey, and William form an LLC by contributing $20,000, $50,000,
$55,000, and $150,000 respectively. The LLC is designated to be member-managed.
When a decision regarding the LLC’s business is put to vote, Mary, Harvey, and Harold
vote “yes” and William votes “no.” Which of the following is true in this context?
A) William’s decision prevails as he has invested the maximum capital.
B) No conclusion can be derived as the vote is not unanimous.
C) Mary, Harvey, and Harold’s decision prevails due to simple majority.
D) The decision is put to vote among employees of the company.
Is the Uniform Computer Information Transactions Act (UCITA) a state statute? How
does a state’s existing e-commerce and licensing statute work in conjunction with the
UCITA?
The Labor Management Relations Act of 1947 is also known as the ________ Act.
A) Landrum-Griffin
B) Gompers-Lewis
C) Taft-Hartley
D) Wagner