Archives: Quiz

A bank may not charge a postdated check against a customer’s account unless the customer notifies the bank, in a timely manner, to pay the check before the stated date. Perfection is usually accomplished without filing a financing statement. Answer: […]

Implied warranties can arise from a “usage of trade.” The clerk of a bankruptcy court must provide consumer-debtors with information on the types of services available from credit counseling agencies. Answer: t Veronica is a repairperson for Wind Power Company. […]

In a share exchange, some or all of the shares of one corporation are exchanged for the shares of another, and both corporations cease to exist. Market power is the ability of a firm to enter a given market. Answer: […]

When a negotiable instrument contains the notice required under FTC Rule 433, a consumer can bring any defense to payment that he or she has against the seller of a product against a subsequent holder as well. The alter-ego theory […]

A partner may pursue his or her own interests without automatically violating the partner’s fiduciary duties to the partnership and the other partners. Intentional discrimination by an employer against an employee is known as disparate-treatment discrimination. Answer: T An agent […]

A joint effort by businesspersons to obtain legislative action can be exempt from the antitrust laws. If a buyer breaches a contract, the seller can choose to simply cancel the contract. Answer: T Preemptive rights permit a director to veto, […]

For property insurance, the insurable interest must exist when a policy is purchased. If a great degree of skill is required, this may indicate that a person is an employee hired for a specialized job and not an independent contractor. […]

On May 1, Newtown Motors, a used-car dealer, wrote a letter to O”Reilly, which stated, “We have a 1969 Pontiac Firebird in mint condition that we will sell you for $12,500 at any time before June [Signed] Newtown Motors.” By […]

The duration of a franchise is a matter determined by federal or state statutes. A franchisor can suggest retail prices for the goods that a franchisee sells but cannot mandate them. Answer: T A limited liability company must be managed […]

Under a life insurance policy, in the absence of contractual exclusion, any cause of death is one of the insurer’s risks. Under the fictitious payee rule, the payee’s indorsement is not treated as a forgery, and an innocent holder can […]

Title VII of the Civil Rights Act of 1964 prohibits job discrimination against majority group individuals, such as white males. The parties to a sales or lease contract can expressly provide for remedies in addition to those provided in the […]

Presentment warranties cannot be disclaimed with respect to checks. Metal Smelting & Foundry Inc.’s complex spews smoke and odors. The site features its own rail system, and trucks enter and exit the complex night and day. Neal and other residents […]

An exclusive-dealing contract is an agreement in which a seller agrees not to sell to a buyer’s competitors. The state cannot dissolve a corporation under any circumstances. Answer: F An agency relationship created for a purpose that is contrary to […]

The roof in Rosalyn’s house springs a leak. She contracts with Shelter Roofing & Restoration Company to repair the roof and fix the damage to the house. Rosalyn pays 10 percent of the price in advance. Shelter Roofing does the […]

As the beneficiary of a business trust, Kevin’s liability for trust debts and obligations is a. limited to his capital investment in the trust. b. limited to his personal assets. c. nothing. d. unlimited. Arnie is a member of Bowling […]

Luke and Maya form Northwest Air Express, a general partnership. The essential elements of this partnership do not include a. a sharing of profits and losses. b. a joint ownership of the business. c. an equal right to management in […]

Rita believes that Shady Grove Apartments, Inc., her landlord, has violated the law in a way that entitles her to withhold the rent. This remedy is generally associated with a. adverse possession. b. breach of the implied warranty of habitability. […]

Disc & Shoe Brakes Corporation, a brake manufacturer, sells its products to Eastside Motors, a retailer, at lower prices than it charges Fast Brake, a competitive retailer. This price discrimination is legal a. under any circumstances. b. unless its effect […]

Commerce & Business Insurance, Inc., has a valid reason to cancel a policy issued to DIY Auto & Truck Parts Company. In most states, Commerce & Business could cancel the policy a. on advance oral or written notice. b. on […]

Odell, an accountant, prepares for Pronto Tacos Corporation a financial statement that omits a material fact. The financial statement is included in Pronto Tacos’s registration statement, which Qiana reads. Qiana buys Pronto Tacos stock. Under Section 11 of the Securities […]

Drill Makers, Inc., and Edge Mine & Mill Supply Stores enter into a contract for a sale of mining drill bits. The contract indicates that the price includes transportation costs to a specific destination by including the term a. C.I.F. […]

Donald approves on behalf of Evelynbut without authorizationa contract with Farouk to build a new silo. Evelyn does not ratify the contract. The deal with Farouk is a. an enforceable contract with Donald. b. a voidable contract. c. an enforceable […]

GR8 Stores, Inc., hires Haul-Way Company, a common carrier, to transport 500 Intelo Game consoles from San Diego to Phoenix. En route, a pothole causes the truck to crash, damaging the goods. Liability for the damage most likely rests with […]

To borrow money to finance the start-up of his business, Rollo executes an instrument in favor of Security Bank. For the instrument to be negotiable, the signature must be a. anywhere on the instrument. b. anywhere on the lower half […]

Dorothy files a petition for bankruptcy in bankruptcy for relief through an individual’s repayment plan. If she is granted a discharge, debts that will most likely be discharged include a. claims not provided for by the plan. b. payments on […]

Marcos buys a pneumatic drill from NuTools, Inc. Owen leases a table saw from Piecework Tools Sales & Lease Company. Later, Marcos and Owen become aware of defects in the goods that indicate breaches of warranty. An action for breach […]

Burst-o”-Flavor Burger Restaurant Corporation merges with Chick-E Chicken Franchise Corporation, with Burst-o”-Flavor absorbing Chick-E Chicken. After the merger a. a different, new entity is the surviving corporation. b. Burst-o”-Flavor and Chick-E Chick”n are both surviving corporations. c. Burst-o”-Flavor is the […]

Under federal law, the calorie content of the food on a menu must be posted by Organic Mix, LLC, if Organic Mix is a. a restaurant chain with twenty or more locations. b. a food distributor with twenty or more […]

Kip opens an account at a Lotsa Goodies Store, and buys a digital music player and other items, but makes no payments on the account. To collect the debt, Mako, the manager, contacts Kip’s parents. This violates a. no federal […]

Diderot’s accountant is Esteban and his attorney is Figaro. All states protect, as privileged information, Diderot’s communications with a. Esteban and Figaro. b. Esteban only. c. Figaro only. d. none of the choices. Cruz, a sugar cane farmer in Brazil, […]

The U.S. Small Business Administration issues a new regulation that will have a significant impact on a substantial number of small businesses. Under the Regulatory Flexibility Act, the agency must do all of the following except a. measure the cost […]

Maxi Retail Corporation is subject to a decision by the National Labor Relations Board. Maxi Retail appeals the decision, arguing that it is arbitrary and capricious. This could mean that the decision a. followed a consideration of legally appropriate factors. […]

Mythic Games Company employs two hundred workers full-time. If Mythic Games plans to have a mass layoff, it must provide its employees with notice of at least a. thirty days. b. sixty days. c. ninety days. d. one year. Online […]

According to the terms of Diego’s will, specific gifts are made, and taxes and other es- tate expenses and debts are paid. The assets of Diego’s estate that remain are most likely to be distributed a. by codicil. b. holographically. […]

A party to a sales contract may demand at any time that the other party provide adequate assurance of performance. Consideration always must be an act or the promise to perform an act. Answer: F Agent’s may intentionally make themselves […]

Ordinarily, a court will not consider whether a contract is fair or unfair. In the absence of a statute requiring a writing, a contract may be oral or written. Answer: T When we speak of government regulation of business we […]

Trademarks and service marks are recorded with the Register of Copyrights. An agreement cannot be enforced if it does not set forth every contractual detail. Answer: F A person who buys a note from a holder in due course knowing […]

Employment testing and educational requirements must be “job-related”; that is, employers must prove that employment testing and educational requirements bear a relationship to job performance. Suretyship is governed by the UCC. Answer: F New York follows the “contact” rule in […]

The act of stopping payment on a check imposes no liability on the depositor. An agency may arise by appointment, conduct, ratification, or operation of law. Answer: T When the desired use of land is in harmony with the general […]

A bank may file a voluntary petition with the bankruptcy court. If a debtor specifies the debt to which a payment is to be applied and the creditor accepts the money, the creditor is bound to apply the money as […]

In a negotiable instrument, the promise or order to pay must be unconditional. A court can dismiss an individual debtor’s petition if the debtor does not satisfy the means test. Answer: T When a special endorsement is made, the instrument […]

The rule of law imposing vicarious liability on an innocent employer for the wrong of an employee is known as the doctrine of respondeat superior. When a sales contract is broken by the buyer, the seller has only the remedies […]

If while trespassing a hunter kills game, the game belongs to that hunter. No private or limited offerings of securities are exempt from the SEC registration requirements. Answer: F Embezzlement involves fraud. Answer: T Under UCC Article 2, specific performance […]

For the purposes of determining holder in due course status, the requirement of value is similar to consideration. The creditor first must proceed against the debtor before suing the surety. Answer: F When the privity rule is applied, a bank […]

The Age Discrimination in Employment Act forbids discrimination by employers against persons over 30 years of age. A person who makes public information stored in a computer can never be held liable for invasion of privacy. Answer: F An employee […]

Strict liability is one type of tort. The contributory negligence of the client does not reduce the liability of an accountant who is liable for malpractice. Answer: F Incapacity of the maker or drawer is a limited defense not available […]

An insurable interest in property must exist at the time that the loss is suffered, while an insurable interest in life must exist at the time that the policy is issued. “Without reserve” auctions give the auctioneer the right to […]

Individuals who post defamatory messages in a “chat room” are protected from liability for defamation. The intention to ratify an unauthorized act may be expressed by words or conduct. Answer: T Sound business practice dictates the use of written contracts […]

If a warehouse receipt provides for the delivery of the goods “to the bearer,” the receipt may be negotiated by transfer of the document. The tort of intentional infliction of emotional distress requires proof of outrageous conduct and resulting emotional […]

Under the United States Supreme Court’s definition, an investment contract exists if the following elements are present: (1) an investment of money, (2) a common enterprise, and (3) an expectation of future profits from the efforts of others. Peter applied […]