Archives: Quiz

Who amongst the following is an “expert” under Section 11 of the Securities Act of 1933? A. A consultant who is an independent director of a company making a public distribution of securities. B. An auditor who issues an opinion […]

Which of the following must obtain a National Pollution Discharge Elimination System (NPDES) permit? A. A manufacturing firm buries its hazardous waste materials in a special dump. B. A factory discharges industrial wastewater from a point source into a river. […]

Pulse Corp. maintained a warehouse where it stored its manufactured goods. Pulse received an order from Star. Shortly after Pulse identified the goods to be shipped to Star and before moving them to the loading dock, a fire destroyed the […]

Fred Sweet runs dancing classes for middle-aged and elderly people. Some of Fred’s customers lack physical coordination, and injuries from kicks, falls, etc. are common. Fred naturally fears that injured customers will sue him for negligence. Thus, he makes each […]

Which article of the UCC specifically addresses and governs leases of goods? A. Article 3 B. Article 2 C. Article 2A D. Article 4 Which of the following is true regarding the approach taken by the UCC toward the proper […]

A testator’s children would be called his issue. The Private Securities Litigation Reform Act of 1995 requires an auditor to: A. report to the Securities and Exchange Commission a client’s illegal act that has a material impact on the financial […]

John is a partner of Aegon Services, a limited liability partnership firm. He committed fraud and embezzled $1 million from a client. The other partners would not be personally liable for John’s malpractice. Utilitarianism is based on the laissez faire […]

Any contract that is deemed illegal is also a criminal violation. Generally, professional shareholders are personally liable for the obligations of the professional corporation. FALSE While professional shareholders have no personal liability for the obligations of the professional corporation, such […]

A & K Inc. obtains a charging order against Bob, a partner in Foter and Poter Partnership. Such an act will cause the partnership to dissociate. An individual can sue a former employer for OSHA violations that the individual witnessed. […]

Article 2 of the UCC mandates that the parties to a sales contract state in specific and unambiguous language the exact terms of the contract. Otherwise, courts will declare the contract unenforceable. Wire transfer is used for transfer of funds […]

The UCC provides for a transfer warranty on unauthorized or repetitive remotely created checks. In determining whether consideration exists, the law is not concerned with any disproportion in value between the things exchanged in a contract. TRUE As long as […]

Ratification has to be expressly made only in written form. An instrument can be made payable to two or more payees. TRUE An instrument can be made payable to two or more payees. The general rule on the duration of […]

Agency is a two-party relationship in which the agent is authorized to act on behalf of the principal. The doctrine of stare decisis states that like cases should be decided alike. TRUE The standard for choosing and applying prior cases […]

Transfer of corporate assets to shareholders for less than fair market value is called “looting.” The First Amendment prohibits state regulation of deceptive commercial advertising. FALSE There is no First Amendment obstacle to federal or state regulation of deceptive commercial […]

A famous journalist predicted the result of an NBA match between the LA Groves and LA Phantoms in favor of the Phantoms, based on the present form of Groves. Accordingly, Mark placed a huge bet on the Phantoms and lost […]

An unsecured credit transaction involves the greatest benefit to the creditor. If an agent has authorized his subagent to make a certain contract and this authorization is within the authority granted to the agent by his principal, the principal is […]

A surety has a right of exoneration. Straight voting permits a single holder of more than 30 percent of the shares of a corporation to dominate the management of the corporation. FALSE Straight voting permits a holder of more than […]

Specific performance is almost never awarded in contracts for the sale of land. The mutual agreement necessary to create an express contract is evidenced by writing. FALSE In an express contract, the parties have directly stated the terms of their […]

A remedy limitation is more likely to be declared unconscionable in consumer cases involving personal injury. Josh acquires beneficiary rights under a contract between Sunny and James. Any modification to that contract which discharges Josh of his rights under the […]

In order to satisfy the writing requirement of the statute of frauds, both parties must provide the entire agreement in writing. The term for outsiders who attempt to gain control of a corporation is called raiders. TRUE Outsiders who attempt […]

Under the common law, artisans, innkeepers, and common carriers were not entitled to liens. A principal is liable on a contract made by his agent if the agent had actual authority to make the contract. TRUE The principal in an […]

In a partnership agreement, partners are not criminally liable when a partner commits a crime in the course and scope of transacting partnership business, even if they knew of the partner’s criminal tendencies and placed him or her in a […]

During the early period of American history the state governments issued special charters that created corporations. Corporations are generally liable on preincorporation contracts signed by their promoters. FALSE A promoter remains liable on a preincorporation contract even after the corporation’s […]

The principal’s death automatically terminates an existing agency. In the absence of a decision by the members of an LLC, any member can demand the distribution of profits prior to the dissolution of the LLC. FALSE No member of an […]

When both the bank and the customer failed to use ordinary care to prevent alteration or forgery of checks then a comparative negligence is used to determine liability for damages. The Securities and Exchange Commission (SEC) is an example of […]

Mr. Blue is driving to work and gets into an accident. Since he was on his way to work Mr. Blue will be able to recover damages through his state’s Workers Compensation system. Sometimes, Article 2 of the UCC holds […]

Unless established differently in the Articles of Incorporation, a quorum for a shareholders meeting is a simple majority. The principal’s ratification of a contract can be implied from his conduct, even if the principal says nothing to ratify. TRUE Implied […]

Under the principle of “Respondeat Superior,” an employer is not liable for torts committed by employees. Kathy writes a check on her checking account with a bank. Kathy is the payee here. FALSE A draft has three parties to it: […]

The plaintiff can sue the defendant in whatever court, and in whatever locale that the plaintiff wishes. Under the UCC if a liquidated damage clause in a contract turns out to be non-enforceable then the injured party can sue for […]

A typed or rubber stamped signature is sufficient if it is put on the instrument to validate it. Michael and William contracted for Michael to mow William’s lawn once a week for 20 weeks, at a price of $20 per […]

A majority of the members of an LLC must agree for a plan to merger. If a buyer treats goods shipped to him/her as though he owns them then the UCC considers the buyer to have accepted the goods. TRUE […]

Mei issues purchase order to June for goods which costs $25,000. June agrees to provide the same but she doesn’t sign the purchase order. Mei can file a suit for the breach of contract. Real property includes land but does […]

Mr. Green purchases a treadmill from Mr. Brown. Mr. Green tells Mr. Brown that he is purchasing the treadmill to jog and sprint. The treadmill that Mr. Green purchases does not allow for speeds faster than walking. Mr. Green should […]

International law regulates lease terms in the United States. The Local Government Antitrust Act of 1984 eliminates damage actions against municipalities and their officers, agents, and employees for antitrust violations and makes injunctive relief the sole remedy in such cases. […]

(p. 143-144)-Coolers Inc. has developed a new generation of air conditioners. It has upgraded the old technology by making the air conditioners work on voice sensors instead of remote control. Though the technology is new, Coolers has decided to introduce […]

(p. 217)-Large and hierarchical firms disaggregate in order to: A. lengthen new product development cycles. B. prevent large-scale downsizing. C. become more responsive to technological changes. D. curb the entrepreneurial culture within them. (p. 304)-Which of the following statements is […]

(p. 34)-Which of the following statements is true of geographical clustering? A. The proximity of many competitors serving a local market leads to competition that increases their pricing power in their relationships with both buyers and suppliers. B. Close proximity […]

(p. 113)-According to Porter’s five-force model, the degree to which a firm relies on one or a few suppliers will influence its ability to negotiate good terms. (p. 102)-Many start-up firms demise because new innovations tend to be adopted very […]

(p. 112)-In general, the more firms competing that are of comparable size, the more competitive the industry will be. (p. 131)-The ratio of R&D expenditures to sales is known as R&D trajectory. FALSE (p. 291)-The value of a technological innovation […]

(p. 226)-The customization of products and processes to a local market makes them particularly difficult to transfer to divisions serving different markets. (p. 57)-Firms cannot influence the shape of the s-curve through their development activities. FALSE (p. 242)-A company with […]

(p. 47)-The path a technology follows through time is termed as technology trajectory. (p. 51-52)-S-curves in technology performance and s-curves in technology diffusion are fundamentally different processes. TRUE (p. 295)-If a firm’s objective is maximum market skimming, it will initially […]

(p. 269)-Homogeneous teams should possess more information, on average, than heterogeneous groups. (p. 137)-Standard discounted cash flow analysis has the potential to severely undervalue a development project’s contribution to a firm. TRUE (p. 84)-Network externality returns refers to the value […]

(p. 163)-Product life cycles shorten with high-speed technological changes. (p. 114)-Weekly News Inc. bought the paper mill that supplied paper for printing its magazine. This is an example of horizontal integration. FALSE (p. 3)-Externalities are costs that are borne by […]

A cash budget would not include: A. sale of common stock. B. payment of dividends. C. payment of property taxes. D. plant and building depreciation. A(n) _____________ is the minimum cost that can be incurred, which when subtracted from the […]

Additional paid-in-capital represents: A. The difference between the total amounts invested by the stockholders and the par or stated value of the stock. B. Distributions of earnings that have been made to the stockholders. C. Distributions of earnings that have […]

The production cost of a single unit of a manufactured product is determined by: A. dividing total direct materials and direct labor for a production run by the number of units made. B. dividing total direct materials, direct labor, and […]

OldSchool Corp. is reviewing its method of evaluating capital expenditure proposals using the accounting rate of return method. A recent proposal involved a $200,000 investment in a machine that had an estimated useful life of five years and an estimated […]

A journal: A. is where transactions are initially recorded. B. is where transactions are posted to after they are initially recorded. C. serves as an index to the ledger. D. is the same as a source document, such as an […]

Calculate the annual cash dividends required to be paid for each of the following preferred stock issuances: (a.) $2.40 cumulative preferred, no par value; 300,000 shares authorized, 235,000 shares issued, 14,000 shares held as treasury stock. (b.) 10%, $50 par […]

When a machine having a net book value of $15,000 is sold for $12,000: A. current assets decrease, equipment (net) increases, and net income increases. B. current assets increase, equipment (net) decreases, and net income increases. C. current assets increase, […]