If no other form of business organization is chosen in a business operated by only one
person, the business is by default a sole proprietorship.
The party to whom the duty is owed is the delegatee.
In a landlord-tenant relationship, the tenant receives a nonfreehold estate in real
property.
Vertical mergers create an increase in market share because the merging firms serve
different markets.
A cashier’s check is a two-party check.
An “as is” disclaimer implies that all implied warranties are disclaimed.
The delivery of goods to a common carrier creates a bailment for the sole benefit of the
bailor.
________ is a law used by some states in which the court orders an equal division of
marital property to the divorcing spouses.
A) Equitable distribution
B) Adjusted distribution
C) Community property distribution
D) Marital distribution
A(n) ________ is a contract by which the owner of a software or a digital application
grants limited rights to the owner of a computer or digital device to use the software or
digital application for a limited period and under specified conditions.
A) e-license
B) ISPS
C) domain
D) digital signature
A collection of criminal statutes is referred to as a ________.
A) constitution
B) bill
C) charter
D) penal code
What was the doctrine of caveat emptor in sales or lease contracts?
A) It was law balanced risk of loss between seller and buyer.
B) It was a law that stated the risk of loss was completely on the buyer.
C) It was a law that gave more protection to the buyer in a sales contract.
D) It was a law that stipulated the issue of warrants in sale or lease transactions.
A rule that says that an accountant is liable for negligence to third parties who are
projected users of the client’s financial statements is known as ________.
A) the foreseeability standard
B) the Ultramares doctrine
C) the due diligence defense
D) the privity of contract
________ specify the methods and procedures that are to be used by public accountants
when conducting external audits of company financial statements
A) Generally accepted accounting principles
B) Generally accepted auditing standards
C) Auditor’s expert opinions
D) General engagements and agreements
Kelly borrows $12,000 from Terry Oswald to pay for her mother’s surgery. The
debt-repayment period is 15 months, but Kelly manages to repay it in 11 months.
Which of the following must be filed by Oswald after receiving the final installment of
his money?
A) financing statement
B) statement of collateral claim
C) termination statement
D) continuation statement
The laborers at Lillon Fabrics are paid on a daily-wage basis. When the employee union
announces a strike that involves cessation of work, one of the employees, Lina, is
hesitant to participate, as it would mean her employer withholding her pay. Which of
the following is true of this case?
A) Lina must participate in the strike as participation in all union activities is mandatory
for the employees.
B) Lina need not participate in the strike.
C) Lina’s employer is obligated to pay her even if she ceases to work and join the strike.
D) Lina must find a replacement employee before joining the strike.
________ is said to have occurred if a certificate of limited partnership was not
properly filed.
A) Defective formation
B) Illegitimate partnership
C) Void partnership
D) Voidable association
A pedestrian trips and falls on a poorly-lighted sidewalk in front of Kate Geller’s house
and is injured. If the pedestrian sues for damages, which of the following parties would
be liable to pay the damages?
A) the civic authority
B) Kate Geller
C) the residents’ association of the locality
D) the pedestrian
________ refers to jurisdiction to hear a case because of jurisdiction over the property
of the lawsuit.
A) In rem jurisdiction
B) Quasi in rem jurisdiction
C) Private jurisdiction
D) In personam jurisdiction
A director or corporate officer who usurps a corporate opportunity would be in violation
of the director’s fiduciary duty called ________.
A) duty of obedience
B) duty of loyalty
C) duty of care
D) self-dealing
According to the Revised Model Business Corporations Act (RMBCA), what
establishes a quorum to hold a meeting of the shareholders?
A) a majority of outstanding shares
B) a majority of unissued shares
C) a majority of treasury shares
D) a majority of liquidated shares
________ is a restraint of trade in which a seller refuses to sell one product to a
customer unless the customer agrees to purchase a second product from the seller.
A) Tying arrangement
B) Predatory pricing
C) Price fixing
D) Group boycott
________ is a form of co-ownership of real property that can be used only by married
couples.
A) Cooperative
B) Tenancy in common
C) Joint tenancy
D) Tenancy by the entirety
According to the ________, evidence obtained from an unreasonable search and seizure
can generally be prohibited from introduction at a trial or an administrative proceeding
against the person searched.
A) presumption of innocence doctrine
B) double jeopardy rule
C) exclusionary rule
D) Miranda rights
The term ________ refers to a mode of acceptance that is indicated from what is
customary in similar transactions, usage of trade, or prior dealings between the parties.
A) express authorization
B) implied authorization
C) option contract
D) unequivocal acceptance