Acct 324 Exam 2
When a party receives a share of profits for payment from the sale of goodwill of a business or some other property, there is: A. no partnership. B. a limited liability partnership. C. a voluntary and consensual partnership. D. a limited partnership.
A
Which of the following documents certifies that a corporation is authorized to conduct business? A. A certificate of incorporation B. Articles of incorporation C. Articles of partnership D. A certificate of partnership
A
Which of the following is true of the rights given to limited partners in a limited partnership? A. Limited partners have the right to share in the profits of the business. B. Limited partners do not possess the right to receive an account of the partnership. C. Limited partners have the right to dissolve the limited partnership. D. Limited partners typically recover their investment after general partners do.
A
Which of the following primarily governs the internal operations of labor unions? A. The Landrum-Griffin Act B. The Taft-Hartley Act C. The Employment-at-Will Doctrine D. The Wagner Act
A
Which of the following statements is true of a joint venture? A. It is usually terminated when all the stock has been sold. B. It must be an agreement between two large businesses. C. It must be formed by drawing up a formal agreement. D. It is automatically terminated when one of the members dies.
A
Which of the following statements is true of a stock certificate? A. A stock certificate includes a corporation's name and the number of shares it represents. B. Appearance of the number of shares on a stock certificate is illegal. C. The availability of a physical stock certificate is a must to indicate ownership in a corporation. D. Multiple copies of a stock certificate can be requested at no cost.
A
Which of the following statements is true of independent contractors? A. Building contractors, doctors, stockbrokers, and lawyers are types of independent contractors. B. All independent contractors are agents. C. Independent contractors can enter into contracts on behalf of the principal even without the authorization from the principal. D. Employers are generally liable for the actions of independent contractors.
A
Which of the following statements is true of the liquidation phase of termination? A. In cases of involuntary dissolution, courts automatically appoint a receiver to handle liquidation duties. B. The liquidation phase of termination begins before dissolution takes place. C. In cases of voluntary dissolution, liquidation duties fall on the shareholders. D. Liquidation is the process by which the shareholders convert the corporation's assets into cash and distribute it among themselves.
A
Which of the following statements is true of the requirements for ratification to be effective? A. The principal must have complete knowledge of all material facts regarding the contract. B. The principal can accept certain parts of the agent's act and reject others. C. The principal can avoid ratifying the unauthorized act. D. An individual must avoid misrepresenting himself or herself as an agent for another party.
A
A _____ is a relationship between two or more persons or corporations created for a specific business undertaking. A. business trust B. joint venture C. syndicate D. cooperative
B
A _____ occurs when a legal contract combines two or more corporations such that only one of the corporations continues to exist. A. suretyship B. merger C. consolidation D. hybrid agency
B
A cell phone business is an example of a: A. chain-style business operation. B. distributorship. C. manufacturing arrangement. D. cooperative.
B
A(n) _____ entitles a creditor to a partner's profits while the partner continues to act as a partner and engage in the partnership business. A. warrant of execution B. charging order C. attachment of earnings order D. marshaling order
B
According to the Uniform Partnership Act (UPA), which of the following must be given the highest priority during the distribution of liquidated assets? A. Payment of profits distributed to partners on the basis of the partnership agreement B. Payment to creditors of the partnership C. Payment to partners of the capital they invested D. Payment of refunds or loans to partners for loans made to the firm
B
An agent who feels that he or she is not being properly compensated, especially when working on commission,: A. can enact a constructive trust. B. can demand an accounting. C. cannot withhold performance of duties. D. can use right of avoidance.
B
An employer who has repeatedly violated the Americans with Disabilities Act (ADA) may be subject to fines of up to ____. A. $300,000. B. $100,000. C. $100 per day D. $44,000.
B
Edward hires a lawyer to serve as his agent. The lawyer is disbarred later because he was engaged in a series of illegal cases. Under the given circumstances, the agency relationship is terminated due to: A. renunciation by the agent. B. impossibility. C. change in law. D. changed circumstances.
B
If a principal is partially disclosed: A. the third party would be aware of the principal's identity. B. the third party would be aware of the principal's existence but not his or her identity. C. the third party would not know that an agent is acting on behalf of the principal. D. only the agent would be liable in accordance with the contract.
B
In the context of a merger, the surviving corporation's right to sue for debt and damages on behalf of the absorbed corporation is called a(n): A. chose in possession. B. chose in action. C. easement by prescription. D. due diligence defense.
B
Partners have implied authority to: A. use partnership property for a purpose that is outside the partnership interest. B. purchase goods necessary to perpetuate a business. C. sell any property without the consent of all other partners. D. use partnership property to pay a personal debt.
B
Partnership is considered a legal aggregate of the partners when: A. it is treated as a "person" separate from the partnership with a life of its own. B. partnership debts eventually become the debts of the individual partners. C. it is sued or being sued. D. the partnership is taxed as a separate being.
B
Principal-agent relationships are most significant for issues that are included in the category of _____ law. A. wage B. contract C. tort D. discrimination
B
The Family and Medical Leave Act (FMLA) covers: A. the birth but not the adoption of a child. B. the placement of a foster child in an employee's care. C. public employers but not private employers. D. newly joined employees who have an experience of one month.
B
A _____ is an investment group that comes together for the explicit purpose of financing a specific large project. A. business trust B. joint stock company C. syndicate D. cooperative
C
A gratuitous agent is one who: A. finds a buyer for one party and a seller for another. B. freely substitutes his or her judgment for that of the principal. C. acts without consideration. D. is paid for his or her services.
C
A partnership by estoppel exists when: A. an agreement addresses the date or event that signals the agreement's expiration. B. the partners' names, as well as the name of the partnership, are clearly mentioned in an agreement. C. a third party is aware of and consents to a misrepresentation of partnership. D. a nonpartner represents himself or herself as a partner, and the third party fails to rely on this information.
C
According to the doctrine of _____, corporations are liable for torts and crimes committed by their agents during the scope of their employment. A. lex incorporationis B. actus reus C. respondeat superior D. ultra vires
C
An agent who makes an unauthorized agreement has failed to meet the duty of _____. A. cooperation B. performance C. obedience D. accounting
C
Federal Deposit Insurance Corporation (FDIC) is an example of a _____ corporation. A. closely held B. private C. public D. nonprofit
C
Identify the correct statement about the inspection rights of a shareholder. A. Shareholders cannot appoint an agent to conduct an inspection on their behalf. B. Corporations cannot deny shareholders the right to inspect confidential corporate information. C. Shareholders can inspect records and books only if they ask in advance and have a proper purpose. D. Shareholders have the right to inspection under statutory law but not under common law.
C
Which of the following statements is true of incorporators in accordance with the Revised Model Business Corporation Act (RMBCA)? A. An incorporator is required to be a subscriber. B. More than one incorporator is required to incorporate a business. C. Generally, the only duty of incorporators is to sign the articles of incorporation. D. An incorporator is required to be a promoter.
C
Which of the following statements is true of limited partnerships? A. All the partners in a limited partnership play an active role in the management of the business. B. If a general partner dies, a limited partnership is typically unaffected. C. Limited partners pay taxes on their share of the profit in a business. D. Limited partners assume unlimited personal liability for a partnership's debts.
C
Which of the following statements is true of officers? A. Officers own the stock of the company, and their goal is to increase the value of the company's stock. B. Rules of agency are not applicable to officers. C. Officers are executive managers whom the board of directors hires to run the day-to-day business of the corporation. D. Outside officers authorize corporate policy decisions.
C
Which of the following statements is true of promoters? A. They offer to purchase stock in a corporation during the incorporation process. B. They cannot enter into any contract as needed. C. They prepare a corporation's incorporation papers. D. They are agents of infant corporations.
C
In a consolidation, _____. A. two or more corporations combine such that one corporation absorbs another corporation, yielding a single surviving corporation B. one company splits into two, forming a second company, which is separately listed on the stock exchange C. two or more corporations combine to form an entirely new corporation, with its own legal status D. one company acquires another public company, whose shares are listed in the stock exchange
C
In the context of defenses to claims under Title VII, the _____ defense is usually raised when hiring or promotion decisions are partially based on test scores. A. bona fide occupational B. seniority C. merit D. disparate treatment
C
In which of the following types of takeovers does the aggressor gradually accumulate a substantial number of the target corporation's shares and then initiate a proxy fight? A. Cash tender offer B. Hostile takeover C. Beachhead acquisition D. Exchange offer
C
Joshua enters into an agreement with Cathy, an interior designer, to redo his house. Once Cathy has completed designing and decorating the house, she no longer has the authority to act on Joshua's behalf. Under the given circumstances, the agency terminated due to: A. impossibility. B. lapse of time. C. fulfillment of purpose. D. renunciation by the agent.
C
The Fair Labor Standards Act requires that: A. employees of both sexes be paid a minimum wage of $5.55. B. covered employees be paid one and one-half times their regular wages for hours worked in excess of 30 in one week. C. a minimum wage of a specified amount be paid to all employees in covered industries. D. executives be paid by their employees for double time.
C
The first major piece of federal legislation adopted explicitly to encourage the formation of labor unions and provide for collective bargaining was the _____ Act. A. Taft-Hartley B. Landrum-Griffin C. Wagner D. Omnibus Crime Control and Safe Streets
C
The most influential power of shareholders is to: A. appoint and supervise officers. B. make financial decisions for a corporation. C. elect and remove directors. D. authorize corporate policy decisions.
C
Under the Americans with Disabilities Act (ADA), if a charge has been filed with the state agency, an Equal Employment Opportunity Commission (EEOC) charge must be filed within _____ days of receiving notice of the termination of the state proceedings. A. 10 days B. 180 days C. 30 days D. 60 days
C
When a person enters into a limited partnership by contributing $20,000 to it, as a limited partner: A. he or she cannot be held liable for more than $10,000. B. he or she has unlimited personal liability for the debts of the partnership. C. he or she cannot be held liable for more than $20,000. D. his or her liability is restricted to double the amount of capital invested in the business.
C
When an agent makes authorized expenditures in the course of working on behalf of the principal, and the principal refuses to pay the agent, the principal is violating his or her: A. duty of accounting. B. duty of performance. C. duty to reimburse. D. duty to compensate.
C
Which of the following statements is true of the liability of shareholders? A. Shareholders who do not buy shares are not personally liable for breach of contract. B. Shareholders are not liable when a company loses money. C. Shareholders can be held personally liable for receiving illegal dividends. D. Shareholders who receive watered stock are liable to the extent of the par value of the stock.
C
Which of the following best explains duty of care of partners to one another? A. Partners must, in good faith, work for the benefit of the partnership. B. Partners who derive benefit from the partnership without the consent of the other partners must notify them of this benefit. C. Partners must perform their management functions to the best of their abilities. D. Partners must disclose any material facts affecting the business.
C
Which of the following statements is true of a de facto corporation? A. It substantially meets the requirements of the state incorporation statute. B. It is recognized by the courts as a corporation that makes minor errors in the incorporation process. C. Its existence as a corporate entity can be challenged only by the state. D. It is a status that is likely to be given when a corporation lacks adequate capital for formation
C
Which of the following statements is true of a partnership at will? A. It is an agreement that does not state exactly what capital contributions each partner will make. B. It is an agreement that does not specify the objective or duration of the partnership. C. It is an agreement that does not state the division of profits as well as losses. D. It is an agreement that does not specify the partners' names, as well as the name of the partnership.
C
A partner may apply to the court to dissolve the partnership when: A. a partner is incapable of carrying out his or her duties as established by the partnership agreement. B. a partner is expelled from the partnership in accordance with the partnership agreement. C. a partner is adjudicated bankrupt. D. the partnership business engages in an activity that suddenly becomes illegal.
A
An agency relationship: A. can be created only for a lawful purpose. B. cannot be formed by implied authority. C. cannot be created by ratification. D. can be formed only by contract.
A
Anne and Ted skip a day of work. Their employer, Julie, fires Anne but does not fire Ted. The main reason for firing Anne was that she is a young and beautiful girl. This is an example of: A. disparate treatment. B. disparate impact. C. unintentional discrimination. D. sexual harassment.
A
Identify the correct statement regarding a short-form merger. A. It occurs when a parent corporation merges with a subsidiary corporation. B. It cannot occur without shareholder approval. C. The parent corporation must own at least 60 percent of the outstanding shares of each class of the subsidiary's stock for it to occur. D. The subsidiary's shareholders and directors must possess veto power to approve the plan.
A
In a _____, partners divide the profits and management responsibilities and share unlimited personal liability for the debts. A. general partnership B. franchise C. business trust D. limited partnership
A
In a tender offer, the aggressor: A. offers target shareholders a price above the current market value of the stock. B. offers to exchange the target corporation's current stock for stock in the aggressor's corporation. C. offers to pay cash for the target corporations stock. D. gradually accumulates a substantial number of the target corporation's shares and then initiates a proxy fight.
A
Misrepresentation liability depends on: A. whether the principal authorized the agent's act. B. the agent's duty of cooperation. C. the doctrine of "respondeat superior." D. whether the agent/employee was acting in the scope of employment.
A
Partners complete the winding-up stage: A. by taking account of the assets of the partner who has left and redistributing them among the other partners. B. when any partner stops fulfilling the role of a partner to the business by choice. C. by working for the benefit of the partnership in accordance with the partnership agreement. D. when any partner stops fulfilling the role of a partner to the business by default.
A
The Age Discrimination in Employment Act (ADEA) of 1967 applies to: A. employees or applicants of age 40 or older. B. employers of age 35 or above. C. only to employment agencies that have not less than 50 members and the members are 40 or older. D. only to unions that have 10 or more members who are 50 or older.
A
The Equal Pay Act prohibits any employer from: A. discriminating on the basis of sex by paying lesser salary to women for the same amount of work. B. paying lesser salary to a woman where the basis of payment is a merit system. C. paying lesser salary to a woman employee as compared to a male employee who is higher up in the seniority scale. D. using a system which measures earnings by quantity or quality of production.
A
The _____ is a federal law that sets minimum A. standards for most voluntarily established pension and health plans in private industry to provide protection for individuals in these plans. B. Fair Labor Standards Act C. Employee Retirement Income Security Act D. Workers' Compensation Laws Federal Unemployment Tax Act
A
The goal of the _____ within a corporation is to raise the value of a company's stock. A. shareholders B. frontline managers C. officers D. directors
A
Which of the following statements is true of the right of survivorship? A. The rights in specific partnership property pass to the surviving partners. B. The surviving partners need not necessarily account to the deceased partner's estate for the value of that partner's interest in the specific property. C. A partner's personal creditor can seize specific items of partnership property. D. A partner's share of profits and a return of capital contributed by the partner pass to the surviving partners.
A
Which of the following statements is true of the rights and liabilities of the shareholders in a corporation? A. Shareholders' liability is limited to their investment in a corporation. B. Shareholders do not have to pay tax for the dividends they receive. C. Shareholders of a corporation can sell their shares but cannot give them to charity. D. Shareholders of a corporation are required to participate in corporate management by default.
A
Which of the following termination occurs by act of parties? A. Renunciation by an agent B. Disloyalty of agent C. Changed circumstances D. Impossibility
A
Which of the following types of termination occurs due to operation of law? A. Disloyalty of agent B. Renunciation of agent C. Revocation of authority D. Agency coupled with an interest
A
_____ consists of negotiations between an employer and a group of employees so as to determine the conditions of employment. A. Collective bargaining B. Covenant dealing C. Informational picketing D. Omnibus control
A
_____ requires that if a corporation cannot pay the required dividends in a given year, it must pay them in the next year before it pays any common stock dividends. A. Cumulative preferred stock B. Convertible preferred stock C. Redeemable preferred stock D. Participating preferred stock
A
The public policy exception: A. provides that an implied employment contract may arise from statements the B. employer makes in public meetings. prohibits employers from firing employees engaged in activities that further the public interest. C. assumes that every employment contract contains an implicit understanding that the parties will deal fairly with one another. D. is limited to public activities such as serving on jury duty, doing military service, and filing for or testifying at hearings for workers' compensation claims.
B
Under workers' compensation laws, _____. A. the employees are not allowed to the employee injury costs B. the covered workers injured on the job can receive financial compensation through an administrative procedure C. the injuries occurring on the way to and from the job are within the course of employment, for which damages may be recovered D. the only way workers can claim financial compensation is by suing their employer
B
When a partner withdraws or is expelled according to a partnership agreement, dissolution occurs due to: A. partnership at will. B. the partner's act. C. the act of the court. D. the operation of the law.
B
When partners have created a _____, all the partners assume liability for one partner's professional malpractice, but only to the extent of the partnership's assets. A. general partnership B. limited liability partnership C. limited partnership D. joint venture
B
Which of the following can be a bona fide occupational qualification defense (BFOQ)? A. Excluding white men from applying for jobs in quarries B. Requiring a candidate to be female for modeling female clothing C. Hiring only U.S. nationals since customers prefer to deal only with them D. Avoiding hiring females to avoid the expense of creating different restrooms for men as well as women
B
Which of the following does the Uniform Partnership Act (UPA) mean by the word "association" when using it to define a partnership? A. It means that the partners must operate the business for a profit. B. It means that the partnership is a consensual and voluntary relationship. C. It means that the partners share the management and profits of the business. D. It means that the partnership can be dissolved only when a partner dies.
B
Which of the following is true of the principal's liability for an independent contractor's actions? A. The principal will not be held responsible for any damages caused due to extremely hazardous activities undertaken by the independent contractor. B. The employer cannot escape liability for an independent contractor's tort, if the employer directs the contractor to commit the tort. C. The employer can escape strict liability by hiring an independent contractor to complete the tasks for her. D. An individual who hires an independent contractor is held liable for the independent contractor's tortious actions under the doctrine of "respondeat superior."
B
Which of the following statements is true about a limited liability company (LLC)? A. It is required to allocate profits and losses in proportion to ownership interests. B. It combines the tax advantages and management flexibility of a partnership with the limited liability of a corporation. C. Members of an LLC must be citizens or permanent residents of the United States. D. The members of a limited liability company need not report their share of the profits and losses on their personal tax returns.
B
Which of the following statements is true of a limited liability company (LLC)? A. To obtain limited liability, the owner must give up his or her right to participate in the management of the LLC. B. Each member of a limited liability company gets a say in the management of the company. C. Limited liability of a member is not dependent on the investment he or she makes. D. Uniform Limited Liability Company Act governs limited liability companies in all states.
B
Which of the following statements is true of the Revised Uniform Limited Partnership Act (RULPA)? A. It is the law governing general partnerships. B. It changes as lawmakers revise it to better achieve social goals. C. All states follow RULPA. D. Once a new version of RULPA is available, the previous version becomes invalid.
B
Which of the following, as suggested by the courts, is the most important duty an agent owes to the principal? A. Duty of performance B. Duty of loyalty C. Duty of notification D. Duty of obedience
B
Who among the following plays the role of decision makers? A. Stakeholders B. Directors C. Shareholders D. Managers
B
_____ are takeovers to which the management of the target corporation objects. A. Exchange offers B. Hostile takeovers C. Beachhead acquisitions D. Cash tender offers
B
n the context of the types of bonds, no assets support a corporation's obligation to repay the face value of: A. callable bonds. B. unsecured bonds. C. convertible bonds. D. income bonds.
B
Which of the following statements is true of the purchase and sale of assets? A. Shareholders of the acquired corporation who disagree with the transfer of assets cannot demand appraisal rights in most states. B. When an asset purchase occurs, the acquiring corporation assumes ownership and control over only the tangible assets of the selling corporation. C. The selling corporation needs the approval of both its board of directors and its shareholders before it can sell its assets. D. Under normal circumstances, asset purchases change a corporation's legal status.
C
A corporation is a(n) _____ corporation in states in which it conducts business but is not incorporated. A. C B. S C. alien D. foreign
D
According to the _____, a court may find a corporate officer criminally liable regardless of the extent to which the officer took part in the criminal activity. A. rochdale principles B. doctrine of ultra vires C. internal affairs doctrine D. responsible person doctrine
D
In filing a Title VII claim of employment discrimination, an employee must file a charge with the EEOC within _____ days of the alleged discriminatory act. A. 120 B. 90 C. 10 D. 180
D
In the context of discrimination based on sexual orientation, which of the following statements is true? A. The District of Columbia does not prohibit discrimination based on sexual orientation or gender identity. B. The Defense of Marriage Act allowed same-sex couples to enjoy the same rights as that enjoyed by other married couples. C. Section 2 of the Defense of Marriage Act specifies that every state "shall be required to give effect" to same-sex marriages granted by other states. D. There is currently no federal legislation that prohibits discrimination based on sexual orientation.
D
Individuals who place themselves outside an employer's place of business for the purpose of informing passers-by of the fact(s) of a labor dispute are engaged in _____. A. primary boycotts B. embargo C. secondary boycotts D. picketing
D
The _____ outlaws the intentional interception of electronic communications and intentional disclosure or use of the information so obtained. A. End User License Agreement B. Electronic Communications and Transactions Act C. Electronic Communication and Transmission Act D. Electronic Communications Privacy Act
D
The right of first refusal is a method of restricting: A. purchase of a new issue of stock. B. ownership in a corporation. C. corporate dissolution. D. stock transferability.
D
Title VII of the Civil Rights Act of 1964: A. is divided into seven sections called titles. B. applies to employers who have less than 15 employees for at least 20 consecutive weeks. C. does not apply to Indian tribes and employment agencies. D. prohibits employers from firing employees on the basis of racial discrimination.
D
When a principal falsely leads a third party to believe that another individual serves as his or her agent, the principal has created agency by: A. ratification. B. agreement. C. implied authority. D. estoppel.
D
When an agent commits a crime: A. the principal cannot be held liable for the crime under any circumstance. B. he or she would be relieved from liability if the crime was committed within the scope of employment. C. he or she would be relieved from liability if the crime was committed to accomplish the objectives of the agency. D. the principal can be liable for the crime if he or she authorized the criminal act.
D
When the principal is disclosed: A. the third party is aware of the principal's existence but not his or her identity. B. the agent is partially liable because he or she is a party to the transaction. C. the agent is the only person who could be liable for the agreement. D. the principal is liable for the agreements made with the third party.
D
Which of the following is excluded from a franchise agreement? A. Sales quotas and record-keeping requirements B. Location of the franchise C. Method of termination of the franchise D. Price at which the franchisee sells the goods
D
Which of the following statements best defines a cooperative? A. It is a business organization governed by a group of trustees, who operate the trust for the beneficiaries. B. It is a partnership agreement in which company members hold transferable shares while all the goods of the company are held in the names of the partners. C. It is an investment group that comes together for the explicit purpose of financing a specific large project. D. It is an organization formed by individuals who usually pool their resources to gain an advantage in the market.
D
Which of the following statements best defines affiliated directors? A. They are executive managers whom the board of directors hires to run the day-to-day business of a corporation. B. They are officers or employees of a corporation. C. They are shareholders who are not legally recognized as owners of corporate property. D. They are outside directors who have business contacts with a corporation.
D
Which of the following statements is true of a constructive notice? A. It is received by parties directly related to the agency agreement. B. It is rarely used to announce the termination of an agency agreement. C. It must be given to third parties who have had business interactions with the agent, and it directly informs them about the termination. D. It usually consists of publication in a generally circulating newspaper for the area where the agency agreement existed.
D
Which of the following statements is true of a limited partnership? A. If a limited partnership is dissolved, the limited partnership's assets are equally divided between the partners. B. Both general partners and limited partners have the right to act as agents of a limited partnership. C. Limited partners and general partners have limited personal liability for all partnership debts. D. A limited partnership can be dissolved if the term established in the certificate of limited partnership expires.
D
Which of the following statements is true of the liability of incoming partners? A. A new partner has no liability for any obligations that occurred before he or she was added. B. A new partner can be held personally liable for the obligations that occurred before he or she was added. C. The capital a new partner adds cannot be used to pay off debts that occurred before he or she was added. D. A new partner assumes limited liability for any obligations that occurred before he or she was added.
D
Which of the following statements is true of the requirements for mergers and consolidations? A. The board of directors of the dissolving corporation need not necessarily approve the merger or consolidation plan. B. The involved corporations must submit the merger or consolidation plan to the governor's office. C. Most states require the approval of three-fourths of the outstanding shares of voting stock. D. The shareholders of all involved corporations must approve the plan by a vote at a shareholder meeting.
D
Which of the following statements is true of the right to compensation of partners in a partnership relationship? A. When a partner dies during the term of a partnership, the surviving partners are not entitled to any compensation for services. B. Partners do not possess the right to create salaries for any partner in a partnership agreement. C. Partners cannot receive a salary irrespective of whether the other partners agree to pay a salary to that particular partner. D. Partners do not enter into a partnership relationship with a right to compensation for performing business activities.
D