Under the MBCA, the corporation can issue shares in return for the promoters’
preincorporation service.
Answer:
Tim takes a shortcut across John’s yard on his way to school. Even if John gives Tim
permission to use John’s yard as a shortcut, Tim has still trespassed on John’s property.
Answer:
The FTC has legal authority to assist overseas investigations to track down Internet
scammers using devices such as spam and spyware.
Answer:
In order to keep Pat from leaving the house, Geoff locked the front door of his house
but forgot to lock the back door. Geoff has falsely imprisoned Pat.
Answer:
Under Kantianism, an ethical decision is one that maximizes utility for society as a
whole.
Answer:
A voidable contract is necessarily unenforceable.
Answer:
A building that deviates slightly from the contract’s specifications would not qualify as
substantial performance.
Answer:
By forming an LLP, the personal assets of partners not involved in wrongdoing by
other members of the firm will be sheltered from malpractice claims against the firm.
Answer:
According to the new federal sentencing guidelines implemented as part of
Sarbanes-Oxley, the U.S. Sentencing Commission judges should increase the fines for
companies if their directors do not take reasonable steps to monitor managerial conduct
in order to discover and prevent criminal activity.
Answer:
Debt securities transfer ownership interest in the corporation.
Answer:
Libel and slander refer to acts of oral defamation by a malicious agent.
Answer:
An accountant may not delegate his/her duties to someone else without the consent of
the client.
Answer:
Conditions in contracts:
A. must be created in writing to be binding.
B. can be created only by the use of special words.
C. can be implied.
D. must always occur concurrently.
Answer:
People who file a voluntary petition:
A. must be insolvent.
B. must be able to allege that they have debts.
C. seek to have the debtors’ assets distributed among the trustees.
D. must have 12 or more creditors.
Answer:
Under the mandates of RICO, an individual injured by the racketeering of a company
can claim treble damages. This means that he/she can:
A. recover three times the damage plus attorneys’ fees.
B. recover two times the damage plus attorneys’ fees.
C. only recover three times the damage.
D. recover the basic amount lost plus attorneys’ fees.
Answer:
On October 29, 1989, Al Glitz agrees to paint Georgia’s house during the Thanksgiving
week for $4,000 in exchange for Georgia’s promise to pay him $4,000 in cash
immediately upon completion of the work. Which of the following statements is TRUE
with regard to this case?
A. Georgia could hire another painter on October 31 without legal liability to Al
because until he has painted the house, he has not given any consideration for Georgia’s
promise to hire him.
B. Al could back out of the deal on October 31 without legal liability to Georgia
because she has not given any consideration for Al’s promise to do the work until she
pays him.
C. Both parties are bound on October 29 because each has given consideration for the
other’s promise, and neither may back out without legal liability.
D. Al could back out of the deal on October 29 without legal liability if he could prove
that $4,000 was inadequate consideration to paint Georgia’s house.
Answer:
Under this theory, a person’s undisclosed, self-serving use of another’s information to
purchase or sell securities, in breach of a duty of loyalty and confidentiality, defrauds
the individual who provided the information.
A. The classical theory of insider trading liability.
B. The misappropriation theory of insider trading liability.
C. The fraud-on the-market theory.
D. The price disparity theory.
Answer:
Which of these actions are applicable under the Uniform Gifts to Minors Act?
A. Adults are prohibited from making gifts of unregistered securities to minors.
B. Adults can make a gift of money to minors by depositing the money with a bank in
an account in the donor’s name.
C. Gifts of registered securities can be made by merely delivering the securities to a
bank trustee.
D. Gifts of unregistered securities can be made by registering the securities in the name
of another adult.
Answer:
An indorsement that specifies the purpose of the indorsement or specifies the use to be
made of the instrument is a:
A. special indorsement.
B. restrictive indorsement.
C. blank indorsement.
D. qualified indorsement.
Answer:
State statutes of frauds generally agree:
A. that memorandums satisfying the requirement for a writing need only be signed by
the party to be bound.
B. that the entire contract be in writing and that the writing be in a single document in
the form of a letter.
C. that only a series of numbers unique to each person printed on a memorandum will
suffice as a signature.
D. that the signature should appear on the bottom left corner of the memorandum.
Answer:
If Kate promises a stereo to Uli, which of the following holds TRUE with regard to the
idea of consideration?
A. Uli will not be able to enforce Kate’s promise if he has not done anything in return.
B. Uli need not offer adequate consideration to Kate in return for her promise.
C. Kate’s promise need not be supported by consideration.
D. Uli’s consideration should be an act and not a promise.
Answer:
Open policies allow the insured to recover:
A. the fair market value of the property at the time it was destroyed, up to the limits
stated in the policy.
B. the difference between the limits stated in the policy and the fair market value of the
property.
C. the fair market value of the property, even if that value exceeds the limits stated in
the policy.
D. the fair market value of the property only if the loss is partial.
Answer:
Describe the Gramm-Leach-Bliley Act of 1999 (GLBA).
Answer:
The Safe Harbor Legislation:
A. aims at giving the bidder and the target company equal opportunities to present their
cases to the shareholders.
B. applies only when the target company’s equity securities are registered under the
1934 Act.
C. holds companies immune from liability as long as they warn the public about factors
that might undermine their forecasts.
D. applies to transactions executed on a securities exchange as well as face-to-face
transactions.
Answer:
Which of the following is a basic obligation or right of the buyer and seller concerning
the payment for goods?
A. The price of the goods must be paid only in money, else the seller can consider the
goods to be rejected by the buyer.
B. If there is no agreement for extending credit to the buyer, the buyer must pay for
them on delivery.
C. If all or part of the price of goods is payable in real property, then both the transfer of
goods and real property are covered by the law of sales of goods.
D. The buyer has the right to inspect the goods before payment under all circumstances.
Answer:
Anyone who discharges industrial wastewater from a point source into a river must:
A. do so in compliance with the Resource Conservation and Recovery Act.
B. obtain a permit from the American National Standards Institute (ANSI).
C. obtain a National Pollution Discharge Elimination System (NPDES) permit.
D. follow standards prescribed by the Marine Protection, Research, and Sanctuaries Act
of 1972.
Answer:
In order to enforce a judgment against an unwilling loser of the judgment, a court can
issue:
A. a writ of quo warranto.
B. a writ of garnishment.
C. a writ of certiorari.
D. a writ of mandamus.
Answer:
When a debtor files a bankruptcy petition, the creditor may be relieved from an
automatic stay on his actions against the debtor:
A. if the creditor can show that his actions do not give adequate protection to the debtor.
B. if the debtors file a plan of reorganization that has a reasonable chance of being
confirmed.
C. if his actions are aimed at obtaining possession of the debtor’s property.
D. if the creditor can show that the stay jeopardizes his interest in certain property.
Answer:
_____ was drafted with the intention of addressing the issue of global warming through
collective international action.
A. NEPA
B. The Clean Water Act
C. The Koyoto Protocol
D. The Copenhagen Consensus
Answer:
Whether an item can be considered “necessary”:
A. depends on the circumstances of the agreement.
B. depends on the minors’ station in life.
C. doesn’t depend on who provides for it.
D. doesn’t depend on the minors’ age.
Answer:
When a corporate manager makes an honest error in judgment, the business judgment
rule directs that:
A. the manager will be liable for corporate losses.
B. the manager will not be liable and a court will step in to correct the manager’s
mistake.
C. the manager will not be liable if he acted with care and in good faith.
D. the manager will be liable for all losses resulting from the error.
Answer:
This is a contract device for securing the balance due the seller on the purchase price of
real estate.
A. Deed of trust
B. Land contract
C. Mortgage
D. Materialman’s lien
Answer:
Under the near privity approach, accountants may be liable in negligence to third
parties when:
A. he/she was unaware that the financial reports were to be used for a particular
purpose.
B. the identity of the third parties were unknown to the accountant but, the accountant
knew that these third parties would rely on the reports.
C. the fact that the third party would rely on the reports were unknown to the
accountant.
D. there has been some conduct on the part of the accountant linking him/her to the
third party that evidences the accountant’s understanding of the third party’s reliance.
Answer:
Explain why an appeal can only be taken from a court of record.
Answer:
Define “partnership” and explain its key elements.
Answer:
What requirements must be met if a shareholder meeting is to be conducted remotely?
Answer:
Describe the Hart-Scott-Rodino Antitrust Improvements Act.
Answer:
What is the difference between a limited partnership and a limited liability limited
partnership?
Answer:
Describe the difference between criminal and civil law and the penalties that
accompany violations of each.
Answer: