Business Law for Managers
Review Questions
Course Introduction
Business Law for Managers provides a comprehensive overview of the fundamental legal principles that impact the business environment. The course focuses on equipping managers with the knowledge and skills necessary to identify and address legal issues related to contracts, commercial transactions, corporate governance, employment law, intellectual property, and regulatory compliance. Through case studies and practical examples, students will learn how to make informed managerial decisions that mitigate legal risks and ensure organizational compliance within the framework of national and international laws. This course emphasizes critical thinking and ethical considerations in the application of legal concepts to real-world business scenarios.
Recommended Textbook
Business Law Today Text and Summarized Cases E Standard 9th Edition by Roger LeRoy Miller
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Chapter 1: The Legal Environment
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Q1) The U.S.Congress enacts a new federal statute that imposes liability on businesses emitting significant amounts of a certain pollutant into the environment.This statute applies
A) only to matters not covered by state law.
B) only to those states that adopt the statute.
C) to all of the states.
D) to none of the states.
Answer: C
Q2) In Export Co.v.Imports,Inc.,there is no precedent on which the court can base a decision.The court can consider
A) neither public policy nor social customs and values.
B) public policy only.
C) public policy or social customs and values.
D) social customs and values only.
Answer: C
Q3) Federal administrative agencies specify the powers of Congress.
A)True
B)False
Answer: False
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Page 3
Chapter 2: Constitutional Law
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Q1) The state legislature of Iowa enacts a transportation statute that impinges on interstate commerce.This statute will be
A) balanced in terms of Iowa's interest in regulating a certain matter against the burden placed on interstate commerce.
B) balanced in terms of the burden on Iowa against the merit and purpose of interstate commerce.
C) struck down.
D) upheld.
Answer: A
Q2) The Constitution sets out the authority and the limits of the branches of the government.The term checks and balances means that
A) Congress writes checks and the president balances the budget.
B) each branch of government has some power to limit the actions of the other branches.
C) each branch of government may exercise the authority of the other branches.
D) the president "checks" the courts, which "balance" the laws.
Answer: B
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Page 4
Chapter 3: Courts and Alternative Dispute Resolution
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Q1) Unless otherwise agreed,the result of an online dispute resolution proceeding may not be appealed to a court.
A)True
B)False
Answer: False
Q2) Transnational Corporation and United Shipping,Inc.,agree to a contract that includes an arbitration clause.If a dispute arises,a court having jurisdiction may A) monitor any arbitration until it concludes.
B) order an arbitrator to rule in a particular way.
C) order a party to bring the dispute to court.
D) order a party to submit to arbitration.
Answer: D
Q3) The verdict in a summary jury trial is binding.
A)True
B)False
Answer: False
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Page 5
Chapter 4: Torts and Cyber Torts
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Q1) Lew angrily accuses Mandy,a broker with New Financial Services,of fraudulently inducing him to invest in Open Pit Oil Company,whose wells are dry.The reliance that gives rise to liability for fraud is normally based on a statement of A) emotion.
B) fact.
C) opinion.
D) puffery.
Q2) Under the "danger invites rescue" doctrine,a person who tries to rescue another individual from harm is liable for any injuries to the individual.
A)True
B)False
Q3) Frank slips and falls on Guy's Harbor Tour Boat and is injured.Frank files a suit against Guy's for $500,000.If Frank is 20 percent at fault and Guy's is 80 percent,under the "50 percent rule" comparative negligence principles,Frank would recover A) $0.
B) $250,000.
C) $400,000.
D) $500,000.
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6
Chapter 5: Intellectual Property and Internet Law
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Q1) It is possible to copyright an idea.
A)True
B)False
Q2) Delite Toys,Inc.,makes EZ Goo,a famous children's toy.Without Delite's consent,Fast Adhesives Company begins to use "ezgoo" as part of the URL for Fast's Web site.Fast claims that no consumer would confuse the Web site with the toy.Fast has committed
A) copyright infringement.
B) patent infringement.
C) trademark infringement.
D) no actionable violation.
Q3) In the United States,a patent is given to the first person to file for it.
A)True
B)False
Q4) Mary Kate Corporation allows Ashley Company to use Mary Kate's trademark as part of Ashley's domain name.This is A) a license.
B) a likelihood of consumer confusion.
C) cybersquatting.
D) trademark dilution.
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Chapter 6: Criminal Law
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Q1) Ira signs Jill's name,without her authorization,on the back of a check made out to her.This is
A) burglary.
B) forgery.
C) larceny.
D) no crime.
Q2) Evan is charged with a crime.Almost all federal courts and some state courts would not hold Evan liable if,at the time of the offense,as a result of a mental disease or defect,Evan lacked substantial capacity to
A) appreciate the wrongfulness of his conduct only.
B) appreciate the wrongfulness of his conduct and obey the law.
C) appreciate the wrongfulness of his conduct or obey the law.
D) obey the law only.
Q3) The intent to return the embezzled property is a defense to the crime of embezzlement.
A)True B)False
Q4) It is not a crime to defraud the public through the use of ads on television.
A)True
B)False
Page 8
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Chapter 7: Cyber Crime
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Q1) Impersonating a victim to make provocative comments online is vishing.
A)True
B)False
Q2) Nestor establishes a phony account in Meet+Greet,a social network,and creates a fictitious persona to cyberbully Leona.This is A) cyber stalking.
B) employment fraud.
C) phishing.
D) vishing.
Q3) Sierra digitally copies "Rampage" and other recent films without the authorization of the owners and transfers those copies freely to others via file-sharing Web sites.This is A) piracy.
B) spamming.
C) phishing.
D) vishing.
Q4) Most cyber crimes are new crimes.
A)True
B)False
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Page 9
Chapter 8: Ethics and Business Decision Making
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Q1) Applied Business Corporation makes and markets its products nationwide.Under the stakeholder approach,to be considered socially responsible when making a business decision,Applied must take into account the needs of
A) its consumers, the community, and society only.
B) its employees and owners only.
C) its employees, owners, consumers, the community, and society.
D) no one.
Q2) DeLouse Plastics Corporation pays its executives an excessive amount relative to other employees and to what executives at competitive companies are paid.This is most likely to be challenged as A) illegal and unethical.
B) illegal only.
C) neither illegal nor unethical.
D) unethical only.
Q3) One guideline to evaluating the ethics of a particular action is to "let your conscience be your guide."
A)True
B)False
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10
Chapter 9: Nature and Classification
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Q1) Holiday Sales Company and Global Distributors,Inc.,enter into an express contract for the delivery of imported specialty goods.Express contract terms are given
A) less priority than the parties' prior dealing.
B) less priority than the trade usage in the parties' industry.
C) less priority than the parties' course of performance.
D) more priority than the prior dealing, course of performance, and trade usage.
Q2) A reasonable,lawful,and effective meaning will normally be given to all of a contract's terms.
A)True
B)False
Q3) Bay City Construction,Inc.,a contractor,asks Cool Electric,a subcontractor,to provide certain services.Nothing is expressed about payment.Cool provides the services,but Bay City refuses to pay.In Cool's suit to recover,the chief issue is most likely to be whether these parties had
A) a formal contract.
B) an actual contract.
C) an implied-in-fact contract.
D) a voidable contract.
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Chapter 10: Agreement in Traditional and E-Contracts
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Q1) A partnering agreement can indicate the parties' intent with respect to subsequent contracts.
A)True
B)False
Q2) An agreement is evidenced by a single event: an acceptance.
A)True
B)False
Q3) In an auction,the auctioneer is an offeree.
A)True
B)False
Q4) Wally's Warehouse offers to sell a certain used forklift to Value Lumber Outlet,but it is stolen before Value accepts.Most likely,Wally's must obtain
A) a forklift for Value if Wally's insurance covers the loss.
B) a forklift for Value if it still wants one.
C) nothing for Value because that would extend the time of the offer.
D) nothing for Value because the theft terminated the offer.
Q5) The UETA applies to an e-transaction unless the parties "opt out."
A)True
B)False
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Chapter 11: Consideration, capacity, and Legality
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Q1) Cielo is fifteen.In most states,Cielo would be considered a minor because she is under the age of
A) sixteen.
B) eighteen.
C) twenty.
D) twenty-one.
Q2) To be legally sufficient,consideration must include something of economic value. A)True B)False
Q3) Through fraudulent means,Fred induces Gail to sign a contract to build resort cabins on land that Fred does not own.Gail performs,but Fred does not pay.When Gail learns the truth,she may
A) do nothing with respect to the contract.
B) recover for the performance or its value.
C) recover for the performance only.
D) recover the value of the performance only.
Q4) In contract law,"consideration" refers to the time that a party takes to evaluate a deal.
A)True B)False
13
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Chapter 12: Defenses to Contract Enforceability
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Q1) Under the Statute of Frauds,all contracts induced by fraud must be in writing to be enforceable.
A)True
B)False
Q2) Ollie buys a cup of coffee for $2,a magazine for $5,and a boombox for $600.The requirement of a writing for the enforceability of a contract for a sale of goods at,or for more than,a certain price is governed by
A) the common law.
B) the parol evidence rule.
C) the parties' agreement.
D) the Uniform Commercial Code.
Q3) An integrated contract is a contract with more than one subject or part. A)True B)False
Q4) Misrepresentation of a material fact can occur through words alone. A)True B)False
Q5) An innocent party may seek damages for a fraudulent contract.
A)True
B)False
14
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Chapter 13: Third Party Rights and Discharge
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Q1) Refer to Fact Pattern 13-2.Under the circumstances,with respect to damages,Chris can
A) bring an action immediately.
B) bring an action only after the contract's two-year term begins.
C) bring an action only after the contract's two-year term ends.
D) do nothing.
Q2) An event must be certain to occur to constitute a contract condition.
A)True
B)False
Q3) Concurrent conditions occur only when the parties to a contract are required to perform their respective duties simultaneously.
A)True
B)False
Q4) Refer to Fact Pattern 13-1.With respect to Mutual's duties,Neil's performance most likely
A) discharges Mutual from the contract.
B) has no effect on Mutual's performance.
C) increases Mutual's duties under the contract.
D) suspends Mutual's duty to perform.
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Chapter 14: Breach and Remedies
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Q1) Damages are awarded for whatever injury a nonbreaching party suffers,whether or not the breaching party could have foreseen the injury.
A)True
B)False
Q2) Dobry Die & Mold,Inc.,enters into a contract with Chet's Refitting Service to fix Dobry's precisely engineered molding equipment.If Chet's delays the repair for five days,knowing that Dobry will lose a certain percentage of profit for the delay,Dobry might be awarded consequential damages to
A) establish, as a matter of principle, that Chet's acted wrongfully.
B) provide Dobry with funds for a foreseeable loss beyond the contract.
C) provide Dobry with funds for its loss of the bargain.
D) punish Chet's and set an example to deter others from similar acts.
Q3) Ray breaches his lease with Sunny Properties and vacates the premises six months before the end of the term.In some states,Sunny would have to
A) avoid reletting the premises to recover damages from Ray.
B) make reasonable efforts to relet the premises to mitigate damages.
C) relet the premises to recover damages from Ray.
D) sell the premises to recover damages from Ray.
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Chapter 15: The Formation of Sales and Lease Contracts
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Q1) Office Equipment Leasing,Inc.(OEL),agrees to lease five computer workstations to Product Promotion Corporation (PPC).Before any interest in the workstations can pass from OEL to PPC,they must be
A) in existence and identified as the goods in the contract.
B) in existence only.
C) identified as the specific goods designated in the contract only.
D) none of the choices.
Q2) Diners Café orders five gallons of transfat-free cooking oil from Restaurant Supply,Inc.The seller mistakenly ships the wrong oil,which the buyer keeps,despite the nonconformity.The oil is destroyed in a kitchen fire.The loss is suffered by
A) Diners and Restaurant Supply, but not Diners's customers.
B) Diners, Restaurant Supply, and Diners's customers.
C) Diners only.
D) Restaurant Supply only.
Q3) "Unless otherwise explicitly agreed," title passes to the buyer at the time and place at which the seller physically delivers the goods.
A)True
B)False
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Chapter 16: Performance Breach of Sales Lease Contracts
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Q1) If a buyer wrongfully refuses to accept goods that conform to a contract,the seller may recover damages.
A)True
B)False
Q2) In contracts involving a carrier,a seller can complete performance only through a shipment contract.
A)True
B)False
Q3) Relax Chair Company contracts to deliver 100 chairs to Stuffy Furnishings Store on May 1 for which Stuffy agrees to pay.Relax tells Stuffy on April 15 that delivery will be delayed until June 1.Stuffy may
A) await performance, sue Relax, or suspend its own performance.
B) only await Relax's performance for a commercially reasonable time.
C) only sue Relax for breach of contract.
D) only suspend its own performance.
Q4) The doctrine of commercial impracticability only extends to problems that could have been foreseen.
A)True
B)False
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Chapter 17: Warranties and Product Liability
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Q1) Universal Assembly Company makes espresso machines and sells one to Vim through a misrepresentation on the label on which Vim relies and that results in an injury to Vim.Universal is most likely liable for
A) a commonly known danger.
B) fraud.
C) privity.
D) puffery.
Q2) An express warranty cannot be limited.
A)True
B)False
Q3) Advertisements can include express warranties.
A)True
B)False
Q4) Strict liability applies to the suppliers of component parts.
A)True
B)False
Q5) Express warranties displace all inconsistent implied warranties.
A)True
B)False
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Chapter 18: Negotiable Instrument: Transferability Liability
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Q1) A check "payable to the order of bearer" is neither an order instrument nor a bearer instrument.
A)True
B)False
Q2) Tyrone draws a check payable to "Cash" and presents it to United Bank for payment.This instrument is A) a bearer instrument.
B) an order instrument.
C) valid but nonnegotiable.
D) void.
Q3) Eppie gives a check to Fund Investments to buy 100 shares of stock in GR8 Tech Corporation for Eppie.The price of the shares is constantly fluctuating.Fund Investments asks Eppie to leave the amount of the check blank and allow it to fill in the price when making the purchase.Eppie agrees.Fund Investments buys the stock when the price is $4,000,but fills in the check for $5,000.The check is negotiated as payment for a $5,000 debt to Hasty Accounting Services,which takes the check in good faith and without notice of Fund Investments's act.Hasty later learns that Fund Investments was not authorized to fill in the check for $1,000 over the price.Is Hasty an HDC? If so,for how much?
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Page 20
Chapter 19: Checks and Banking in the Digital Age
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Q1) Each bank in a collection chain must pass a check on before midnight of the day of its receipt.
A)True
B)False
Q2) A stale check is one that has been outstanding for longer than one month.
A)True
B)False
Q3) Generally,the funds represented by a deposited local check must be available for withdrawal within one business day.
A)True
B)False
Q4) A bank has no right to charge a customer's account for the amount of a stale check. A)True
B)False
Q5) Refer to Fact Pattern 19-3.Mike is responsible for A) $0.
B) $50.
C) $500.
D) $3,000.
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Chapter 20: Security Interests in Personal Property
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Q1) Refer to Fact Pattern 20-2.Suppose that Helpful perfects its security interest when GLC takes possession of the equipment.In that circumstance,the party with priority to the collateral on GLC's default would be
A) GLC.
B) Helpful and Interstate proportionately.
C) Helpful only.
D) Interstate only.
Q2) The last security interest to be perfected is the first in priority over any other perfected security interests.
A)True
B)False
Q3) A security interest is not enforceable after the creditor's rights have attached to the collateral.
A)True
B)False
Q4) The concept of a floating lien does not apply to a shifting stock of goods.
A)True
B)False
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Chapter 21: Creditors Rights and Bankruptcy
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Q1) Opie's debt to Pyle is past due.Pyle obtains a judgment against Opie to collect the debt,but Opie refuses to pay.Pyle asks the court to order the seizure and sale of Opie's property.This is a request for
A) a guaranty (or suretyship) contract.
B) an order that would violate most states' laws.
C) a writ of attachment.
D) a writ of execution.
Q2) Before a discharge is granted,a debtor can transfer property or make a payment in preference to one creditor over another.
A)True
B)False
Q3) Brick's debt to Conry is past due.Conry brings a legal action against Brick to collect the debt.To ensure that a judgment in Conry's favor will be collectible,Conry asks the court to order the seizure of Brick's property.Exempt from such an order in most states is A) all of Brick's personal property.
B) as much of Brick's personal property as Brick opts to exempt.
C) equipment that Brick uses in a business up to a specified amount.
D) none of Brick's personal property.
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23
Chapter 22: International Law in a Global Economy
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Q1) Confiscation occurs when a government seizes a private property for a proper public purpose and awards just compensation.
A)True
B)False
Q2) Congresswoman Pelosi and other politicians want to prohibit the import of certain agricultural products that pose a danger to domestic crops.With respect to these products' import,Congress can A) do nothing.
B) impose quotas, but not tariffs.
C) impose tariffs, but not quotas.
D) prohibit the imports.
Q3) Fabiola,or any foreign citizen,can bring a civil suit in a U.S.court for
A) a violation of a treaty of the United States only.
B) a violation of a treaty of the United States or of the law of nations.
C) a violation of the law of nations only.
D) no purpose.
Q4) A party to a licensing agreement generally agrees to pay royalties on some basis.
A)True
B)False
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Chapter 23: Agency Relationships in Business
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Q1) Home Development Company employs llya to buy property for a future residential development.Ilya secretly buys some of the property and sells it to Home Development at a profit.Ilya has breached A) no duty.
B) the duty of accounting.
C) the duty of loyalty.
D) the duty of notification.
Q2) An independent contractor is an employer who controls his or her agent's performance.
A)True
B)False
Q3) A corporate officer is not an agent for the corporation.
A)True
B)False
Q4) If a principal does not ratify an unauthorized contract,the principal is not bound. A)True
B)False
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25
Chapter 24: Employment,immigration,and Labor Law
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Q1) Over a forty-year period,Ewa worked in a variety of jobs.She was also occasionally unemployed,briefly hospitalized,and suffered a temporary disability.She retired last year.The key law on all of these subjects is
A) the Consolidated Omnibus Budget Reconciliation Act.
B) the Employee Retirement Income Security Act.
C) the Federal Insurance Contributions Act.
D) the Social Security Act.
Q2) During a union election campaign at Skyscraper Construction Corporation,the employer can,without monitoring or regulating by the National Labor Relations Board,threaten employees with A) a layoff only.
B) a layoff or a reduction in benefits and wages.
C) a reduction in benefits and wages only.
D) neither a layoff nor a reduction in benefits and wages.
Q3) Generally,an employer's monitoring of electronic communications in the workplace does not violate employees' privacy rights.
A)True
B)False
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Chapter 25: Employment Discrimination
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Q1) Under the Americans with Disabilities Act of 1990,disabled employees are entitled to "reasonable accommodation."
A)True
B)False
Q2) To bring an action against an employer based on intentional discrimination,a person must show that he or she is a member of a protected class.
A)True
B)False
Q3) Piku files an employment discrimination suit against Quotient Accounting,Inc.,under Title VII,based on its discharge of Piku.In these circumstances,possible relief under Title VII includes
A) damages only.
B) damages or job reinstatement.
C) job reinstatement only.
D) neither damages or job reinstatement.
Q4) Under current law,an employer cannot adopt an affirmative action plan.
A)True
B)False
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Chapter 26: Sole Proprietorships and Private Franchises
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Q1) Jody owns KuppaJava Kiosks,a sole proprietorship.Jody's liability is A) limited by state statute and varies from state to state.
B) limited to the extent of capital expenditures.
C) limited to the extent of his or her original investment.
D) unlimited.
Q2) CheezBurger Heaven,Inc.,conducts a chain-style franchise.This involves the transfer to Clive,one of its franchisees,of A) a license.
B) a trade name.
C) the formula to make a product.
D) the ownership of the business.
Q3) Under no circumstances may a franchisor establish an additional franchise in a territory allotted to a franchisee.
A)True
B)False
Q4) Starting a sole proprietorship is easier and less costly than starting any other form of business.
A)True
B)False
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Chapter 27: All Forms of Partnerships
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Q1) A limited partner who participates in the management of the partnership may be personally liable to the firm's creditors.
A)True
B)False
Q2) International Exports,L.P.,is a limited partnership,with $100,000 in de?clared but unpaid profits.International's creditors include Friendly Credit Corporation for $5,000 and Gwen,one of International's limited partners,also for $5,000.When Harry,one of International's general partners,decides to retire,the other general partners vote to liquidate and dissolve the firm.The limited partners,who are not asked their opinions,want International to continue in business and file a suit against the general partners to compel this result.Can the court order International to continue? If not,what is the priority of the distribution of International's assets on its dissolution?
Q3) A partner may use and possess partnership property for any purpose.
A)True
B)False
Q4) A partner cannot "wrongfully" dissociate from a partnership.
A)True
B)False
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Page 29
Chapter 28: Limited Liability Companies Special Business
Forms
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Q1) Build-Rite Construction Corporation and Deals-R-Us,Inc.,combine their efforts to build an office and retail complex.Their form of business organization is
A) a business trust.
B) a joint stock company.
C) a joint venture.
D) a syndicate.
Q2) Jin,Karlo,and other consumers form Metro Purchasing Cooperative.This form of business organization makes it possible for these individuals to
A) avoid personal liability for the acts of the cooperative.
B) obtain an exemption from state laws governing corporations.
C) pay no taxes on their business income.
D) pool their resources to gain an advantage in the market.
Q3) Bee Hive Honey,LLC's members include Chad.For purposes of suing and being sued,Bee Hive Honey is
A) an aggregate of Chad and the other members.
B) a natural person in the members' "family."
C) a legal entity apart from the owners.
D) a non-participating third party.
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Chapter 29: Corporate Formation, merger, and Termination
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Q1) Promoters,not incorporators,must execute the articles of incorporation.
A)True
B)False
Q2) Eye Appliance Company and Fast Courier,Inc.,wish to combine all of their assets,stock,and personnel into a new firm to be called Glasses2Go Corporation.This is A) a consolidation.
B) a merger.
C) an exchange of assets.
D) a takeover.
Q3) In a share exchange,neither corporation's directors need to approve the exchange. A)True
B)False
Q4) Boutique Corporation would like to change its corporate status to avoid income taxes at the corporate level.To qualify,the shareholders must not be A) corporations.
B) estates.
C) individuals.
D) partnerships.
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Chapter 30: Corporate Directors, officers, Shareholders
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Q1) Rosa and Sean are directors of Tech,Inc.The right of Rosa and Sam to be notified of special meetings of the board is the right to A) compensation.
B) indemnification.
C) participation.
D) preemption.
Q2) Shareholders have no responsibility for the day-to-day management of a corporation.
A)True
B)False
Q3) Some states permit a corporate board to have fewer than three directors. A)True
B)False
Q4) Sol is chairman of the board of Tasty Foods Corporation.Uma,a consumer,falls sick after eating a Tasty product.Uma sues Tasty,and Sol individually.Tasty may pay Sal's legal fees
A) only if Sol wins the suit.
B) only if Tasty wins the suit.
C) only if Uma wins the suit.
D) regardless of the outcome.
32
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Chapter 31: Investor Protection, insider Trading, Corp Gov
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Q1) Refer to Fact Pattern 31-3.Under the Securities Exchange Act of 1934,Hu is most likely A) liable for insider trading.
B) not liable because Hu is only a tippee, not a tipper.
C) not liable because Hu is too far down the chain of disclosure.
D) not liable because Hu traded on the basis of a true fact.
Q2) Willful violations of the Securities Act of 1933 may be subject to criminal prosecution.
A)True B)False
Q3) Nouveau Riche Corporation,and its officers,directors,and shareholders,buy and sell securities.SEC Rule 10b-5 applies to
A) only the purchase or sale of a security by a financial corporation.
B) only the purchase or sale of a security involving an officer or director.
C) only the purchase or sale of a security involving a shareholder.
D) the purchase or sale of any security.
Q4) Private parties cannot sue violators of the Securities Act of 1933.
A)True B)False
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33
Chapter 32: Promoting Competition
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Q1) Tasty Eatin' Corporation merges with Hasty Burgers,Inc.This merger between firms that compete with each other in the same market is
A) a horizontal merger.
B) an interlocking directorate.
C) a tying arrangement.
D) a vertical merger.
Q2) Maximum resale price maintenance agreements are subject to analysis under the rule of reason.
A)True
B)False
Q3) Minimum resale price maintenance agreements are subject to analysis under the rule of reason.
A)True
B)False
Q4) A firm can have monopoly power without violating antitrust law.
A)True
B)False
Q5) U.S.firms may be subject to other nations' antitrust laws.
A)True
B)False
34
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Chapter 33: Consumer and Environmental Law
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Q1) Mouth-Waterin' Treats Company wants to sell its candy in a normal-sized package labeled "Gigantic Size." NuFabrics,Inc.,wants to advertise its sweaters as having "That Wool Feel," but does not want to specify on labels that the sweaters are 100 percent polyester.Can these firms market their products as they would like? If not,why not?
Q2) Like other manufacturers and sellers,Happy Household Products Company packages its products with labels.Under federal law,such labels must be A) accurate and use easily understood words.
B) bright and feature eye-catching colors.
C) graphically distinctive and well-designed.
D) interesting and revealing to the average consumer.
Q3) Truckers Storage Depot,a private company,wants to build a warehouse on private land. For this action,an environmental impact statement is A) prohibited. B) required.
C) unnecessary.
D) voluntary.
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Chapter 34: Liability of Accountants Other Professionals
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Q1) Under rules of professional misconduct,an attorney should not engage in conduct involving deceit.
A)True
B)False
Q2) Lulu,an accountant,conducts an audit of Microstuff Toys,Inc.After the conclusion of the audit,the working papers created in preparing the audit must be
A) disposed of immediately.
B) kept until the Public Company Accounting Oversight Board's review.
C) maintained for seven years.
D) retained forever.
Q3) Hadley,an accountant,accumulates working papers while performing an audit for Ilene.After the audit,these documents belong to
A) Hadley, with Ilene having a right of access to the papers.
B) Ilene, with Hadley having a right of access to the papers.
C) neither Hadley nor Ilene-the papers must be disposed of.
D) the Public Company Accounting Oversight Board.
Q4) Aiding or assisting in the preparation of a false tax return is a felony.
A)True
B)False
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Chapter 35: Personal Property and Bailments
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Q1) BroadView Company arranges to have Carrier Corporation,a common carrier,transport 500 DVD players from New York to California.Dan is Carrier's driver.BroadView will have no cause of action against Carrier if Carrier fails to deliver the players on time because
A) authorities are stopping and searching all trucks entering California.
B) Carrier's dispatcher mistakenly delays Dan's departure.
C) Carrier's truck is broken into and the players are stolen.
D) Dan has to wait two days in Denver for the truck to be repaired.
Q2) In a bailment,possession of the property is transferred to the bailee.
A)True
B)False
Q3) Faye owns the land on which Golden Spurs Ranch is situated,plus the ranch house,barn,and other structures permanently attached to the land.Faye's brother Huey owns everything else in the ranch's operation-livestock,feed,and so on.The personal property is owned by
A) Faye and Huey.
B) Faye only.
C) Golden Spurs Ranch.
D) Huey only.
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Chapter 36: Real Property and Landlord-Tenant Law
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Q1) Kailin owns a farm near Manhattan,Kansas,with a farmhouse,barn,and other structures permanently attached.Kailin grows soybeans on the property.A pond lies within the boundaries.Land includes
A) the pond, the soil, and the structures.
B) the pond and the soil only.
C) the soil only.
D) the structures and the soil only.
Q2) Adverse possession is a means of obtaining title to property without the delivery of a deed.
A)True
B)False
Q3) Property Management Corporation (PMC)owns several apartment buildings in two states.Regarding standards for maintenance of the buildings,PMC should consult
A) the applicable city ordinances and state statutes.
B) the previous owners.
C) the long-term tenants.
D) the Uniform Landlords' Maintenance Manual.
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Chapter 37: Insurance, wills, and Trusts
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Q1) Insurance coverage is never effective until a formal written policy is issued.
A)True
B)False
Q2) In most states,a person must be sixteen years of age to execute a valid will.
A)True
B)False
Q3) A business firm may have an insurable interest in the life of a key employee.
A)True
B)False
Q4) Eighty-year-old Clark exhibits confusion,forgetfulness,and disorientation.Dave,Clark's doctor,believes that the symptoms indicate dementia.Elsa,who has significant contact with Clark,believes that he is in a state of mental decline.These facts indicate
A) an urgency that Clark distribute his assets.
B) Clark's lack of capacity.
C) Dave's misdiagnosis.
D) Elsa's intent to take advantage of Clark.
Q5) A will must normally be attested to by two or three witnesses.
A)True
B)False
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