question

What is homestead exemption?

answer

Equity in the home that a debtor is permitted to retain

question

A contractor's, laborer's, and material person's statutory lien that makes the real property to which services or materials have been provided security for the payment of the services and materials.

answer

Construction lien

question

Which of the following bankruptcy methods allows the reorganization of the debtor's financial affairs under the supervision of the bankruptcy court?

answer

Chapter 11

question

If a third party promises to be primarily liable for the payment of the borrower's debt, this is referred to as _____.

answer

a surety arrangement

question

What is true of a guarantor in a guaranty arrangement?

answer

The guarantor is secondarily liable on the debt

question

Ashton borrows $25,000 from Amanda, who lends the money without taking an interest in collateral for the loan, Amanda is relying on Ashton's credit standing when she made the loan. In this case, what kind of creditor is Amanda?

answer

an Unsecured creditor

question

_________ is the rehabilitation form of bankruptcy that permits a bankruptcy court to supervise the debtor's plan for the payment of the unpaid debts in installments over the plan period.

answer

Chapter 13

question

Which of the following has the highest priority claim

answer

The first party to file a financial statement

question

What is true of chapter 7 liquidation?

answer

The debtor's future income cannot be reached to pay the discharged debt

question

A(n) ____________ is a document required to be filed by an equity security holder that states the nature and amount of his or her interest against the debtor.

answer

Proof of interest

question

What is true of tort liability of a general partnership?

answer

A partner can be sued even if he or she did not participate in the commission of the tort

question

What type of liability does a general partner of a limited partnership have for the debts and obligations of the limited partnership?

answer

Unlimited personal liability

question

Why does sole proprietorship not pay taxes at the business level?

answer

It does not have a separate legal existence

question

An association of two or more persons to carry on as co- owners of a business for profit is known as a________.

answer

general partnership

question

Who among the following gets first priority in the distribution of assets upon the dissolution of a partnership?

answer

creditors

question

Under partnership law, __________ have the right to manage the affairs of the limited partnership.

answer

General partners

question

The change in the relationship of partners in a partnership caused by any partner ceasing to be associated in the carrying on of the business is known as_______.

answer

Dissolution

question

Which of the following governs a limited partnership, its internal affairs, and the liability of its limited partners?

answer

The law of the state in which it is organized

question

Orlando opened a hot dog stand in Brooklyn, doing business as Orlando's Red Hots. Unfortunately, the venture has not generated a profit. Orlando borrowed $5,000 from the bank to open his business, and the short term loan is now due. Orlando's friend Bob has suggested partnering with him at the beginning of next year. From which of the following sources can the bank currently recover its $5,000?

answer

Orlando's savings accounts

question

Where a partnership agreement provides for the sharing of profits but is silent as to how losses are to be shared, ________.

answer

Losses are shared in the same proportion as profits

question

Rio Werner Corporation owns Rio's sandwiches, a fast food restaurant in New Jersey. It wants to operate in five cities on the west coast by means of franchisees that make and sell all menu items from Rio's Sandwiches. Which of the following franchises would best suit the Rio Werner Corporation's franchise plan?

answer

Chain style

question

The owner of an LLC is called a ______.

answer

Member

question

A _____ is an arrangement in which two or more business entities combine their resources to pursue a single project or transaction.

answer

Joint venture

question

In states where LLC may be organized by one one member, __________- can obtain the benefit of the limited liability shield of an LLC.

answer

Sole proprietors

question

Which of the following is true of a franchise?

answer

The franchisor and franchisee are established as separate legal entities

question

Which of the following is true of an LLC?

answer

An LLC si regarded as a separate legal entity

question

A(n) _________ is a special form of partnership in which all partners are limited partners, and there are no general partners

answer

LLP

question

YouKnow Inc. is a corporation that creates educational resources. It grants Middlewest Public School the right to use its online encyclopedia for three years in return for a fee. In this arrangement, YouKnow Inc, is the ______.

answer

Licensor

question

Phillip and Deborah form an LLC. Phillip contributes $50,000 capital and Deborah contributes $75,000 capital. They do not have an agreement as to how profits are to be shared. If the LLC makes $100,000 profit in its first year, how will the profit be divided among the members?

answer

Phillip gets $50,000 and Deborah gets $50,000

question

_______ refer to the formal documents that must be filed at the secretary of state's office of the state of organization of an LLC to form the LLC.

answer

Articles of organization

question

According to the provisions set forth by the Sarbanes-Oxley Act, the _________, a federal government agency, may issue an order prohibiting any person who has committed securities fraud from acting as an officer or a director of a public company.

answer

Securities and Exchange Commission

question

A member of the board of directors who is also an officer of the corporation is known as a(n) _________.

answer

Inside director

question

________ are the basic governing documents of a corporation which must be drafted and filed with, and approved by, the state before the corporation can be officially incorporated.

answer

Articles of incorporation

question

Which is true of a C Corporation?

answer

Any corporation with more than 100 shareholders is automatically a C corporation for federal income tax purposes

question

A detailed set of rules adopted by the board of directors after a corporation is incorporated that contains provisions for managing the business and the affairs of the corporation are referred to as __________.

answer

Bylaws

question

Issued shares that have been repurchased by the corporation are referred to as _____.

answer

Treasury

question

Jameson works for Fishy- Mart corporation, a chain of superstores that sells large quantities of seafood. His job is to locate future sites for Fishy Mart stores. Jameson finds a piece of real estate near a coastline that would make a great site for Fishy Mart store. He asks his friend to split the profits when he sells the property to Fishy Mart. Jameson, without disclosing his interest in the property, recommends the site to Fishy- Mart, which purchases the property from Jameson's friend. the friend splits the profits with Jameson. What breach of the duty of loyalty has Jameson committed?

answer

self dealing

question

The _______ Act of 2002 is a federal statute enacted by Congress to improve corporate governance.

answer

Sarbanes- Oxley

question

According to priority, which of the following claimants is the last to be paid after a corporation's assets have been liquidated?

answer

Common stockholders

question

Owners of a corporation who elect the board of directors and vote on fundamental changes in the corporation are known as _____.

answer

Shareholders

question

Utilities Ince decided to go public by an initial public offering. It sold securities, some of which were bought by James Jefferson. Six months later, Mr. Jefferson sold the Utilities shares he had purchased to Martha Graham and Mark Franco. Two years later, Mr. Jefferson bought back the Utilities shares from Ms. Graham and Mr. Franco and made a profit out of both transactions. Identify the issuer

answer

Utilities Inc.

question

Which of the following must be included in the registration statement?

answer

How proceeds from the offering will be used

question

Which of the following is an example of insider trading?

answer

An employee uses material nonpublic information to make a profit by trading in the securities of the company

question

Which of the following best defines an initial public offering (IPO)?

answer

The issuance of securities by an issuer to the public

question

Scissorwire Inc. sells shares of its stock to the public, with each share valued at $16. After a year, the company incurs a loss and the price of the stock drops to $5 per share. The company reveals that it had deliberately not registered with the SEC before going public and that it has no money to pay investors. Which of the following is true in this situation?

answer

The U.S government can file a criminal lawsuit against Scissorwire Inc. to seek criminal penalties

question

Of the following , who is considered a section 16 statutory insider?

answer

Robert Morgan, an employee who owns ten percent of all equity security of KYU corp

question

A (n) _____ refers to a document that an issuer of securities files with the Securities and Exchange Commission (SEC) that contains required information about the issuer, the securities to be issued, and other relevant information

answer

Registration statement

question

A(n) _______- is submitted along with the registration statement to the Securities and Exchange Commission (SEC), and is also used as a selling tool to help prospective investors evaluate the financial risk of an investment.

answer

Prospectus

question

Which of the following is classified under "common securities"?

answer

a debenture

question

Which of the following is true of a registration statement?

answer

A registration statement must be accompanied by financial statements certified by certified public accountants.

question

Miksine Corporation employs Sandy as its marketing manager. Sandy is driving her automobile to attend a meeting with a client on behalf of her employer. On her way, Sandy is involved in an automobile accident that is caused by her negligence. Several people are seriously injured. Which of the following is true of this case?

answer

Minkshine Corporation is liable for the injuries caused by Sandy

question

Which of the following types of relationships exists when a person hires another person to perform some form of physical service but a does not authorize that person to enter into contracts on his or her behalf>

answer

Employer - employee relationship

question

Martin who wants to sell his house authorizes his concierge, William, to find a potential buyer and finalize a deal above a stipulated price. William contracts Chris, a real estate broker, and intends him to only find a potential buyer and send him or her over to William for the sale. Martin then contracts ReNowait Goodhouses, a home improvement company, to renovate the house. ReNowait completes its work and Martin pays the company. Chris then searches for a suitable buyer and finds one in George. George buys the house and Chris paid for the services. Who performs the rold of the agent in this land sale transaction?

answer

William

question

_________ is a situation in which an agent does something during the course of his or her employment to further his or her own interests rather than principals.

answer

Frolic and detour

question

Which of the following is true of principal - independent contractor relationship?

answer

Principals are bound by the authorization contracts of their independent contractors

question

Which of the following is true of an express agency?

answer

It can be either oral or written unless the Statute of frauds stipulates that it must be written

question

Martin who wants to sell his house authorizes his concierge, William, to find a potential buyer and finalize a deal above a stipulated price. William contracts Chris, a real estate broker, and intends him to only find a potential buyer and send him or her over to William for the sale. Martin then contracts ReNowait Goodhouses, a home improvement company, to renovate the house. ReNowait completes its work and Martin pays the company. Chris then searches for a suitable buyer and finds one in George. George buys the house and Chris paid for the services. In this scenario, what role does ReNowait Goodhouses perform?

answer

Independent contractor

question

Which of the following is true of dual agency?

answer

Dual agency is permitted if all parties in the transaction agree to it

question

Marcus employs a real estate broker, Dean, to sell his house. Dean's express powers are to advertise and market the house for sale, show the house to prospective buyers, and accept offers from persons who want to purchase the house. He is not allowed to complete a deal without Marcus's consent. Marcus goes away on a month long trip where he cannot be contacted. During this time, a short circuit in the house causes a power outage. Dean uses his authority to hire an electrician to repair the circuits and restore electricity in his house. Marcus then comes back and pays Dean for electricity repair. What is the nature of the agency that Dean used to fix the electricity problem in the house?

answer

Implied agency

question

Which of the following is a course of action for a principal if an agent is found competing with him or her?

answer

The principal can recover profits made by the agent in the competing venture.

question

Which of following is true of sex discrimination?

answer

Employment discrimination because of pregnancy is sex discrimination

question

Which of the following is an instance of disparate treatment discrimination?

answer

Ghalib, who is fluent in English, is not hired not hired as a writer due Iraqi heritage

question

Which of the following elements constitutes an affirmative defense by an employer whose employee has suffered sexual harassment at the workplace?

answer

The plaintiff - employee failed to take advantage of any preventive or corrective opportunities provided by the employer

question

Which of the following is true of employment discriminations defined under Title VII of Civil Rights Act of 1964?

answer

Disparate- impact discrimination occurs when an employer adopts a work rule that is neutral on its face, but is shown to cause an adverse impact on a protected class.

question

Which of the following best describes quid pro quo sex discrimination?

answer

Discrimination where sexual favors are requested in order to obtain a job or be promoted

question

Which of the following is true of religious discrimination?

answer

Religious organizations can give preference in employment to individuals of a particular religion

question

To claim under disparate - treatment discrimination, the complaint must prove that ______.

answer

He or she belongs to a Title VII protected class

question

An employer pays higher ages to Shelly - who has worked with the company for six years -- than Samuel, who holds a similar position to Shelly and performs the same functions as her, and has worked with the company for only five and a half years. Which of the following is true of this case, assuming that the employer recognizes seniority in its compensation system?

answer

The employer has not violated the equal pay act

question

Which of the following is true of sexual harassment?

answer

Sending offensive e-mail is considered sexual harassment

question

A member of a minority race applies for a promotion to a position advertised as available at his company. The minority applicant, who is qualified for the position, is rejected by the company which hires a nonminority applicant for the position. the minority applicant can see under __________.

answer

Title VII of the Civil Rights Act

question

Which of the following is the only act that includes criminal sanctions for unfair trade practices?

answer

The Sherman act

question

A relevant market is characterized by the presence of ______.

answer

Reasonably interchangeable goods and services

question

Which of the following is true of the per se rule in restraint of trade?

answer

It fails to permit any defenses and justifications to save the restraint of trade.

question

Monopoly is characterized by _________.

answer

Market share above 70 percent in the relevant market

question

The _________ is a federal statute, enacted in 1890, that makes certain restraints of trade and monopolistic acts illegal

answer

Sherman Act

question

Which of the following is a defense to a charge of monopoly?

answer

A natural monopoly

question

The rule of reason is characterized by

answer

An evaluation of the company's market share, power, and other relevant factors

question

__________ laws are a series of laws enacted to specifically limit anticompetitive behavior and monopolistic practices in almost all industries, businesses, and professions operating in the United States

answer

Antitrust

question

A restraint of trade in which two or more competitors at one level of distribution agree not to deal with others at another level of distribution is known as ____.

answer

group boycott

question

The two tests the U.S. Supreme Court has developed for deterring the lawfulness of a restraint are the rule of reason and the ______.

answer

Nolo contendere

question

Which of the following is the most favorable opinion an auditor can give a company following an audit?

answer

An unqualified opinion

question

Which of the following can an accountant use as a defense to liability under section 11(a) of the Securities Act of 1933?

answer

The due diligence defense

question

Monica is an accountant with Mildred & Lane Inc., and she has recently been asked to visit Maine Manufacturers to survey their financial records, assess their compliance with federal and state laws, and provide and opinion reflecting the state of the company's financial records. Monica's assessment of the financial records of Maine Manufacturers is called _________.

answer

Audit

question

A (n) ______ is an auditor's opinion that the financial statements are fairly represented except for, or subject to, a departure from GAAPs, a change in accounting principles, or a material uncertainty.

answer

qualified opinion

question

Which of the following statements is true of Generally Accepted Accounting Principles (GAAP)?

answer

They establish rules for how corporations and accounting firms prepare financial statements

question

If an auditor makes a disclaimer of opinion, this means that the auditor __________.

answer

Cannot draw a conclusion about the accuracy of the company's financial records, generally due to a lack of sufficient information about the records

question

Which of the following standards have most states adopted regarding accountant liability for negligence to third parties?

answer

Section 552 of the Restatement (Second) of Torts

question

Which of the following is true of an auditor of a corporation?

answer

The auditor must be an independent certified public accountant

question

______ is a rule that limits the liability of an accountant or other securities professional to his or her personal degree of fault.

answer

Proportionate liability

question

Verification of a company's books and records pursuant of federal securities laws, state laws, and stock exchange rules that must be performed by independent CPA is known as a(n)______.

answer

Audit

question

Martha contacts a bakery to get a cake for her son's birthday party. She tell the baker that she will pay him $150 for the cake if he delivers the cake on Friday evening. If the baker does not deliver the cake on Friday evening, which of the following is accurate?

answer

Martha cannot sue the baker

question

Alan tells Sherry that he will pay her $5000 if she runs the Boston Marathon. Once Sherry starts running the marathon, Alan __________.

answer

Can reduce the amount of money he offered her, provided he does so before she completes the marathon

question

Stella is injured in a car accident and is transported to the local hospital by emergency personnel. She subsequently passes into a coma. The doctors and other staff perform the necessary medical procedures to save her life. Stella recovers after two months and is discharged form the hospital. Under the doctrine of _______ contract, Stella must pay the hospital for its services.

answer

Quasi

question

According to the objective theory of contracts, the intent to enter a contract is judged by the

answer

reasonable person standard

question

Which of the following statements is true about a counteroffer?

answer

A counteroffer terminates the existing offer

question

The ________ rule states that acceptance is effective when it is dispatched, even if it is lost in transmission.

answer

mailbox

question

Which of the following is true of a gift of promise?

answer

A gift promise can be enforced by a court of law

question

A(n) ________ is a contract that courts refuse to enforce in part or at all because it is so oppressive or manifestly unfair as to be unjust.

answer

unconscionable contract

question

Windsor, the owner of Windsor's Sandwiches, contacts Gary, a new supplier. he promises Gary that he will pay him $375 if Gary delivers 20 pounds of cheese the following morning. Gary promises to make the delivery as requested by Windsor. This creates a(n) ________ contract between them.

answer

Bilateral

question

Yvonne finds a carpenter to do some repairs for her house and tells him that if he finishes the job by Saturday, she will pay him $1,000. Yvonne's offer creates a(n) ________ contract.

answer

unilateral

question

Identify an example of codified law in the U.S.

answer

federal statutes

question

What function of the law is being served when passing laws that prohibit discrimination at workplaces?

answer

promoting social justice

question

The Securities and Exchange Commission (SEC), created by the Congress to enforce federal securities, is an example of a(n) __________.

answer

administrative agency

question

Mark Walton was involved in a car accident in which the airbag failed to deploy. He sued and the company settled.

answer

providing basis for compromise

question

Which of the following statements best indicates how chancery courts were different from law courts?

answer

Chancery courts inquired into merits of a case rather than emphasize legal procedures

question

Which of the following would be considered an example of shaping moral standards, as seen as a function of the law?

answer

Laws discourage drug and alcohol abuse

question

The _______ branch enacts laws

answer

legislative

question

Which school of jurisprudence bases its principles, for solving legal disputes, on broad notions of fairness, and subjective decision making by judges?

answer

the Critical Legal Studies School of jurisprudence

question

Stare decisis is the doctrine of

answer

adhering to legal precedent

question

What was the key factor in the development of the English Common Law?

answer

The use of precedence of past cases for judges to decide present similar cases

question

What does "corporate citizenship" as social responsibility theory in business imply?

answer

Businesses are responsible for helping to solve social problems that they did little, if anything to cause

question

How are ethical rules established in Rawl's social justice theory?

answer

by establishing an original position of veil of ignorance

question

_________is a set of moral principles or values that governs the conduct of an individual or a group

answer

ethics

question

If Steve Templeton decides to close the plant in Kantron, what important business social responsibility will Steve Templeton accomplish?

answer

maximizing profits

question

_______theory is a moral theory that asserts that fairness is the essence of justice

answer

Rawl's social Justice theory

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