Archives: Quiz

The importation of goods that infringe U.S. patents is not prohibited. Answer: A compulsory arbitration in a consumer contract may be unconscionable. Answer: T A patent applicant must demonstrate that an invention is ‘commercially practicable’ to receive a patent. Answer: […]

An involuntary bankruptcy occurs when the debtor forces his or her creditors into bankruptcy proceedings. Answer: In a limited partnership, a general partner’s dissociation from the firm normally will lead to dissolution unless all partners agree to continue the business. […]

Legislative rules simply declare policy and do not affect legal rights or obligations. Answer: Warrants are required to conduct administrative searches in all highly regulated industries. Answer: F Veronica is a repairperson for Wind Power Company. The job requires traveling […]

The litigation process has three phases: filing, answering, and appealing. Answer: Marketable title means that the grantor’s ownership is saleable even if there are encumbrances or defects. Answer: F Liens generally take priority over other claims against the same property. […]

A limited liability company must be managed by nonmembers. Answer: A union may threaten an employee with the loss of a job for failure to join the union. Answer: F An agent has the implied authority to do what is […]

The Federal Reserve Board of Governors has issued a regulation that governs credit provisions associated with sales contracts’”Regulation Z. Answer: Religious rules generally are absolute with respect to the behavior of their adherents. Answer: T Clearly, a judge’s function is […]

Dixie, a driver for Express Delivery Company, leaves the truck’s motor running in neutral and carelessly forgets to set the parking brake while she makes a delivery. The truck rolls and crashes into a nearby gas station pump, igniting a […]

When workers must be laid off, an employer must consider union participation in deciding whom to fire. Answer: The Consumer Product Safety Commission is the primary agency that issues regulations on food labeling. Answer: F The goal of mediation is […]

Ethics is as well defined as the law. Answer: The clerk of a bankruptcy court must provide consumer-debtors with information on the types of services available from credit counseling agencies. Answer: t Shareholders own the corporation, and they have legal […]

A request or invitation to negotiate is an offer. Answer: The term police powers encompasses just the enforcement of criminal laws. Answer: F Intended beneficiaries can sue to enforce a contract. Answer: T Attempted monopolization is a violation of antitrust […]

Most states do not enforce agreements to arbitrate disputes between priÂvate parties. Answer: Answer: A joint effort by businesspersons to obtain legislative action can be exempt from the antitrust laws. Answer: T When a debtor has no assets, creditors are […]

The law imposes strict product liability as a matter of public policy based in part on the assumption that manufacturers can better bear the costs associated with injuries caused by their products. Answer: In arbitration, the third party’s decision may […]

When the harassment of co-workers creates a hostile working environment, an employee may have a cause of action against an employer. Answer: Administrative agencies at various levels of government work together and share the responsibility of enforcing particular regulations. Answer: […]

The United Nations Convention on Contracts for the International Sale of Goods (CISG) is the uniform international sales law of countries that account for more than two-thirds of all global trade. Answer: On May 1, Bobbi-Ann, a real estate agent, […]

Babs sees an e-book reader on the porch of Coco’s house, takes the reader to her home, and tells everyone she owns it. Danno, wielding a knife, forces Easter to give him her smartphone, and runs away with it. Fritz […]

A seller is prohibited from charging different prices to competing buyers for identical goods or services. Answer: Advertising that contains an endorsement by a celebrity will not be deemed deceptive. Answer: F Federal agencies must consider ways to reduce the […]

Vito borrows $110,000 from Watershed Bank to buy a home. If he fails to make payments on the mortgage, the bank has the right to repossess and auction off the property securing the loan. This is a. a short sale. […]

Detroit Automotive Company (DAC) agrees with its employees’ union not to buy any nonunion-produced component parts from other firms for use in DAC products. This is a. a hot-cargo agreement. b. a secondary boycott. c. a closed shop. d. a […]

Kimberly, the owner of Littleton Cinema, trusts Max to manage the theater’s daily cash flow. One night, without Kimberly’s knowledge or consent, Max takes and keeps $1,000 from the receipts. This is most likely a. embezzlement. b. larceny. c. robbery. […]

Donald approves on behalf of Evelyn’”but without authorization’”a 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 […]

Under a perpetual inventory system, inventory shrinkage and lost or stolen goods are more readily determined. Answer: The entries in the Accounts Receivable Credit column of the cash receipts journal must be posted _______________ to the accounts in the accounts […]

On September 5, Borton Corporation acquired 2,500 shares of its own $1 par common stock for $22 per share. On October 15, 1,000 shares of the treasury stock is sold for $25 per share. Instructions Journalize the purchase and sale […]

A contra asset account is subtracted from a related account in the balance sheet. Answer: When plant assets are exchanged, the cost of the new asset is the book value of the old asset plus any cash paid. Answer: F […]

Operating expenses are different for merchandising and service enterprises. Answer: With the exception of land, plant assets experience a ______________ in service potential over their useful lives. Answer: decline Gross profit rate is computed by dividing cost of goods sold […]

Income will always be greater under the cash basis of accounting than under the accrual basis of accounting. Answer: Freight terms of FOB Destination means that the seller pays the freight costs. Answer: T There are three parties to a […]

The ledger accounts given below, with an identification number for each, are used by Kiner Company which uses perpetual inventory methods. Instructions: Prepare appropriate entries for the month of August by placing the appropriate identification number(s) in the debit and […]

Vertical and horizontal analyses are concerned with the format used to prepare financial statements. Answer: In calculating depreciation, both plant asset cost and useful life are based on estimates. Answer: F Cash provided by operating activities fails to take into […]

Purchase Returns and Allowances and Purchase Discounts are subtracted from Purchases to produce net purchases. Answer: The following data exists for Carley Company. Calculate the accounts receivable turnover and the average collection period for accounts receivable in days for 2015. […]

A comparative balance sheet for Rocker Company appears below: Additional information: 1> Net income for the year ending December 31, 2015 was $35,000. 2> Cash dividends of $15,000 were declared and paid during the year. 3> Long-term investments that had […]

The major difference between the balance sheets of a service company and a merchandising company is inventory. Answer: The process of determining the present value is referred to as _________________ the future amount. Answer: discounting To determine a new depreciation […]

Kate Company uses a perpetual inventory system and purchased inventory from Phoebe Company. The shipping costs were $500 and the terms of the shipment were FOB shipping point. Kate would have the following entry regarding the shipping charges: Answer: Conceptually, […]

An inexperienced accountant for Douglas Corporation made the following entries. Instructions On the basis of the explanation for each entry, prepare the entry that should have been made for the transactions. Answer: On May 1, Howard Corporation purchased 2,000 shares […]

A corporation must be incorporated in each state in which it does business. Answer: The times interest earned ratio is computed by dividing net income by interest expense. Answer: F A finance company or bank that purchases receivables from businesses […]

If an investor owns between 20% and 50% of an investee’s common stock, it is presumed that the investor has significant influence on the investee. Answer: The book value of a plant asset is obtained by subtracting ______________ from the […]

If prepaid costs are initially recorded as an asset, no adjusting entries will be required in the future. Answer: Luis Rodriguez wants to buy a car in 3 years. He will need $3,000 for a down payment. The annual interest […]

During December 2014, Markowitz Publishing sold 4,500 12-month annual magazine subscriptions at a rate of $20 each. The first issues were mailed in February 2015. Prepare the entries on Markowitz’s books to record the sale of the subscriptions and the […]

A cash payments journal should not be used to record transactions which require payment by check. Answer: A __________________ fund is used to pay relatively small expenditures. Answer: petty cash The book value of a plant asset is always equal […]

Dougan Company purchased equipment on January 1, 2014 for $90,000. It is estimated that the equipment will have a $5,000 salvage value at the end of its 5-year useful life. It is also estimated that the equipment will produce 100,000 […]

Match the items below by entering the appropriate code letter in the space provided. ____ 1> Net income retained in the corporation. ____ 2> The amount that must be retained in the business for the protection of creditors. ____ 3> […]

Overemphasis on purchase price frequently results in failure to address other significant costs. Answer: Philip Crosby states that the correct cost for a well-run quality management program should be under 2.5 percent of sales. Answer: TRUE How significant is the […]

In the Time-Cost CPM model, cost is assumed to be a linear function of time. Answer: Random errors can be defined as those that cannot be explained by the forecast model being used. Answer: TRUE Random errors can be defined […]

Capability Sourcing refers to outsourcing the functions that they do best to trusted key partners. Answer: CPM is an abbreviation for Critical Path Method. Answer: TRUE CPM is defined as an abbreviation for critical path method in the text. According […]

In forecasting, RSFE stands for “running sum of forecast errors.” Answer: Internet technology has made the sharing of reliable real-time information expensive. Answer: FALSE Internet technology has made the sharing of reliable real-time information inexpensive. Accurate medium-range planning increases the […]

If the fraction defective is 0.12 based on a sample size of 16, the standard deviation used in the “p” chart is about 0.08. Answer: One tool used in total quality management is the run chart. Answer: TRUE The tools […]

The total cost of ownership (TCO) is an estimate of the cost of an item that includes all the costs related to the procurement and use of an item, but does not include any of the costs related to disposing […]

In variables sampling the actual measurements of the variable observed are used regardless of whether the unit is good or bad. Answer: Automobiles and appliances are classified as “pure goods.” Answer: FALSE In exhibit 1.4 automobiles and appliances are classified […]

The sales and marketing plans are typically developed separately from the aggregate operations plan as a way of cross-checking results to insure the integrity of assumptions about the future. Answer: Cyclical influences on demand are often expressed graphically as a […]

Outsourcing is the act of moving some of a firm’s internal activities and decision responsibility to outside providers. Answer: A principle of value stream mapping is to concentrate on speeding up value-added operations. Answer: FALSE Value stream mapping (VSM) is […]

For an activity in a CPM analysis the Early Finish time is 20 and the Late Finish time is 20. Which of the following statements is TRUE? A. The activity’s late start must happen before its early start B. The […]

One SPC tool used in total quality management is the Pareto chart. Answer: In a price break model of lot sizing, to find the lowest-cost order quantity, it is sometimes necessary to calculate the economic order quantity for each possible […]