ACCT 340 Bus Law Hemker Exam 4 Final

Réussis tes devoirs et examens dès maintenant avec Quizwiz!

Margaret, Jack, and Brooke form CPB​ Inc., and each contributes​ $10,000 capital. The corporation borrows​ $100,000 from Community Bank. One year​ later, CPB goes bankrupt and defaults on the loan owed to Community Bank. At that​ time, CPB's only asset is​ $15,000 cash, which Community Bank recovers. Under the shareholder limited liability​ rule, how much will each of these shareholders have to pay Community​ Bank?

$0

What section of the UCC governs sales​ contracts?

Article 2

If not otherwise​ specified, domestic letters of credit are usually governed​ by________.

Article 5 of the Uniform Commercial Code​ (UCC)

​________ must be filed at the secretary of​ state's office of the state of organization of a limited liability company​ (LLC) to form the LLC.

Articles of organization

The 2005 act requires​ a(n) ___________ whereby an attorney who represents a client in bankruptcy must certify the accuracy of the information contained in the bankruptcy petition and the​ schedules, under penalty of perjury.

Attorney Certification

John purchases restaurant equipment from​ Mary, a restaurant equipment wholesaler. John agrees to pick up the equipment in​ Mary's warehouse within a week. Ten days after the​ purchase, the warehouse is damaged by fire and the equipment is destroyed. Who bears the risk of loss and​ why?

Mary bears the risk of loss because this is a​ non-carrier situation and she is a merchant.

​_____________ is an automobile insurance system used by some states in which the​ driver's insurance company pays for injuries or death the driver suffers in an​ accident, no matter who caused the accident.

No-fault coverage

________ is the land itself as well as​ buildings, trees,​ soil, minerals,​ timber, plants, and other items permanently affixed to the land.

Real property

Congress enacted the​ _________________ to allow the shareholders of some corporations to avoid double taxation.

Subchapter S Revision Act

All of the following are examples of transfer warranties made by any person who transfers a negotiable instrument for​ consideration, EXCEPT?

That there are no defenses of any party that are good against the transferee.

Which of the following statements is true regarding limited liability partnerships​ (LLP)?

The LLP is a domestic LLP in the state in which it is organized.

Insurance that compensates employees for work-related injuries is known as​ ______ insurance.

Workers' compensation

Who can transfer good title to a good faith purchaser for​ value?

a person with voidable title

From whom can an original owner reclaim his or her​ goods?

a person with who purchased stolen goods

What is an insurance contract​ called?

a policy

Nathan provides a life estate in property to his friend Eddie. When Eddie​ dies, the interest in the property will go to Scott. What sort of future interest does Scott​ hold?

a remainder

Nathan provides a life estate in property to his friend Eddie. When Eddie​ dies, the interest comes back to Nathan or​ Nathan's estate. What sort of future interest is present in this​ situation?

a reversion

The passing of title for real property from a seller to a buyer for a price is known as​ ________.

a sale

Which is the true statement regarding bankruptcy​ law?

Bankruptcy judges are appointed for​ 14-year terms.

A corporation that does not qualify for or has not elected be taxed as an S corporation is a​ ________.

C corporation

A corporation with more than 100 shareholders would automatically be considered​ a(n) ________.

C corporation

Which of the following statements about a Chapter 11 bankruptcy is​ true?

Chapter 11 is available to​ individuals, partnerships,​ corporations, and other business entities.

Which of the following statements is NOT true regarding property that is exempt from the bankruptcy​ estate?

Federal exemptions are adjusted every 5 years.

Which of the following statements about a life insurance contract is​ true?

If no beneficiary is​ named, the proceeds go to the​ insured's estate.

Bob​ (a merchant) offers Jim​ (also a​ merchant) a sales contract. Jim accepts​ Bob's offer but adds additional terms to the contract. Under common law this would be considered a​ counteroffer; but under the UCC​ Jim's acceptance and addition of terms is still considered part of​ Bob's original offer. This is because of​ the___________ rule.

additional terms

In order to amend the articles of organization for New​ Navy, LLC,​ ________.

all members must vote to amend the articles of organization

Marshall, Ted, and Susan contribute​ $1,000, $7,000 and​ $20,000 respectively to New Navy LLC. Which member will receive the greatest number of​ votes?

all of them will receive the same number of votes

Yijun and Zichu are both members of a limited liability company​ (LLC). The document that governs the relationship among the members and the company is known as​ ________.

an operating agreement

Which of the following is NOT covered by personal liability​ insurance?

any injuries the insured sustains off the property of the insured

Who below would NOT be a party to a life insurance​ contract?

any witnesses who sign the contract

Brooke's next-door neighbor allows Brooke to run a driveway over his land. This sort of easement is known as an easement​ _____________.

appurtenant

The articles of incorporation​ ________.

are the basic governing documents of a corporation

The duration of a limited liability company​ (LLC) is​ ________.

at-will

The number of shares provided for in the articles of incorporation are called​ ________.

authorized shares

What is a finance​ lease?

a​ three-party transaction consisting of a​ lessor, a​ lessee, and a supplier

Sina is in a car accident while on business for Limo​ Lime, LLC. As a result of the​ accident, Tom is injured. If Sina were negligent in causing the​ accident, Tom can recover damages for his injury from​ ________.

both Sina and the LLC

Insurance that reimburses a business for loss of revenue incurred when the business has been damaged or destroyed by fire or some other peril is known as​ ____________ insurance.

business interruption

Accumulated Capital Corporation and Business​ Funds, Inc., form a corporation. The ownership of the corporation is represented by​ ________.

certificates of stock

If all of the elements of adverse possession are​ met, the adverse possessor may acquire​ ______________ title to the​ property, so long as there are no defenses which are meritorious proffered by the current owner.

clear

Insurance that insures​ one's car against risk of loss or damage caused by another car hitting it is known as​ ________ insurance.

collision

The Uniform Commercial​ Code, a model​ law, governs contracts in all of the following situations​ EXCEPT?

commercial transactions involving the sale of services

Property insurance that insures an automobile from loss or damage due to causes other than collision is known as​ ________ insurance.

comprehensive

A situation in which two or more persons own a piece of real property is known as​ ________.

concurrent ownership

The special court that hears and decides business cases in Delaware known as the​ ________.

court of chancery

In a winding up of a​ corporation, which of the following claimants will have highest​ priority?

creditors

Which of the following is NOT a way in which a corporation may be dissolved and​ terminated?

criminal dissolution

Cyberattacks and cyber crimes have led to the development of​ _________ insurance for purchase by businesses.

cyber

If a​ customer's data is stolen electronically from a​ business, the business will file a claim against their​ _______.

cyber insurance policy

A member of a limited liability company​ (LLC) is personally liable for​ ________.

debts and obligations of an LLC up to the amount of their capital contribution

An instrument that describes a​ person's ownership interest in a piece of real property is known as a​ ________.

deed

Medical health insurance plans usually cover all of the following​ EXCEPT?

dental care

Which of the following is NOT one of the methods to discharge a negotiable​ instrument?

destruction of the instrument by accident

In order to select a name for a new​ corporation, the organizer should​ ________.

determine whether the name is federally trademarked

There are three methods of​ _______________: (1) payment of the​ instrument, (2)​ cancellation, and​ (3) impairment of the right of recourse.

discharge

The right to receive a fixed dividend at set periods during the year is known as​ ________.

dividend preference

Darren and Carly are members of Cool Cars LLC. When deciding whether to engage in reckless​ conduct, they should consider their​ ________.

duty of care

A​ person's ownership right in real property is called​ a(n) ________.

estate in land

In the context of a limited liability partnership​ (LLP), a continuation agreement​ ________.

expressly sets forth the events that allow for extension of the limited liability partnership upon dissociation and dissolution

A type of ownership of real property that grants the owner the fullest bundle of legal rights that a person can hold in real property is known as​ a(n) ________.

fee simple absolute

A type of ownership of real property that grants the owner all the incidents of a fee simple absolute except that it may be taken away if a specified condition occurs or does not occur is known as​ ________.

fee simple defeasible

A holder in due course is a holder who takes a negotiable instrument​ ___________________.

free of all claims and most defenses that can be asserted against the transferor

What business organization that is owned by two or members is taxed like an​ LLC?

general partnership

The​ ________ is the party to whom an interest in real property is transferred.

grantee

To qualify as a professional​ corporation, Medical​ Clinic, P.C., must meet all of the following qualifications​ EXCEPT?

have at least​ thirty-five shareholders

If Nancy is a manager of a​ manager-managed limited liability​ company, and she is approached with opportunity to purchase a valuable asset for the​ company, Nancy must consider​ ________.

her duty of loyalty

A(n) ___________ is a person who is in possession of a negotiable instrument that is​ drawn, issued, or indorsed to him or his​ order, or to​ bearer, or in blank.

holder

If the holder takes the instrument with noticeable evidence of​ forgery, the holder would not qualify as​ a(n) ________.

holder in due course

Which defenses may be asserted against a holder in due​ course?

illegality

Ryan enters into a contract with ABC Appliance Center to purchase new kitchen and laundry appliances for his newly constructed apartment complex. A week after signing the​ contract, Ryan notices a​ "Going Out of​ Business" sign in​ ABC's window. Ryan should​ __________.

immediately request an adequate assurance of performance

A limited liability company can conduct business​ ________.

in any state

If a holder takes an instrument from a shady looking character in a dark​ alley, it could be inferred that the holder did not take the instrument​ ________.

in good faith

A limited liability company has the same powers as​ a(n) ______________ to do all things necessary or convenient to carry on its business or affairs.

individual

Incontestability clauses generally protect the​ position(s) of the​ ____________.

insureds

A(n) ________ is a person who has been expressly or impliedly invited to a​ landowner's or​ tenant's premises for the economic benefit of the owner or tenant.

invitee

A form of​ co-ownership that includes the right of survivorship is known as​ ________.

joint tenancy

In a lease​ contract, who is the​ person(s) who transfers the right of possession and use of goods under the​ lease?

lessor

A(n) ________ is a person who is on​ someone's real property legally and with the express or implied permission of the landowner or tenant and is not there to convey an economic benefit to the landowner or tenant.

licensee

An interest in real property for a​ person's lifetime is known as​ a(n) _________.

life estate

An unincorporated business entity that combines the most favorable attributes of general​ partnerships, limited​ partnerships, and corporations is known as a​ ________.

limited liability company

In a​ ___________ managed limited liability company​ (LLC), the managers have the authority to bind the LLC to contracts.

manager-

Under the UCC​ a(n) ____________ is a person who deals in the goods of the kind involved in a​ transaction, or by his or her occupation holds himself or herself out as having knowledge or skill peculiar to the goods involved in the transaction.

merchant

Lars draws a check made​ "pay to the order of Yasmin​ Aslan." Yasmin signs the back of the check and leaves it on the counter at the grocery store. Ross picks it up and cashes it. Can Yasmin obtain a new check from​ Lars?

no, Yasmin converted the order paper to bearer paper and has no recourse

When a property already exists in a zoned area that does not fit within a new zoning use established for the​ area, it is known as​ a(n) ________.

nonconforming use

To obtain property via adverse​ possession, all of the following are needed​ EXCEPT?

permission of the property owner

A holder in due course takes the negotiable instrument free from​ ______ defenses.

personal

The owner of a car may choose to expand his or her automobile liability policy through all of the following​ EXCEPT?

personal articles floater

What is an addition to a home​ owners' policy that covers specific valuable items known​ as?

personal articles floater

A person who organizes and starts a corporation is a​ ________.

promoter

Which of the following is NOT needed by an insurance company to create a personal articles​ floater?

proof of purchase of all items to be covered

Google, Inc. is an example of a​ ________________ corporation.

publicly held

Which of the following is NOT a measure of damages for a buyer when the seller fails to deliver the goods or repudiates the​ contract?

punitive damages

Which of the following is NOT a measure of damages for a lessee when the lessor fails to deliver the goods or repudiates the​ contract?

punitive damages

Buildings constructed on land are​ ________.

real property

Land is the most common form of​ ________.

real property

Plant life and vegetation growing on the surface of land are considered​ ______.

real property

To void a transfer or an​ obligation, the court must find that​ (1) the transfer was made or the obligation was incurred by the debtor with the actual intent to​ hinder, delay, or defraud a creditor or​ (2) the debtor​ _____________________.

received less than a reasonable equivalent in value

A Chapter 11 bankruptcy is known as​ a(n)______________.

reorganization

The lessor has all of the following remedies when the lessee repudiates or breaches the sales contract​ EXCEPT?

replevy the goods

The seller has all of the following remedies when the buyer repudiates or breaches the sales contract​ EXCEPT?

replevying the goods

Common stock represents the​ ________.

residual value of a corporation

All of the following are types of indorsements​ EXCEPT?

retroactive

In a​ _________, the seller delivers the goods to a buyer with an understanding that the buyer may return them if they are not used or sold within a stated period of time.

sale or return contract

Who bears the risk of loss during shipment in a destination​ contract?

seller

Who bears the risk of loss during shipment in a sale on​ approval?

seller

Who bears the risk of loss during shipment in a sale or return​ contract?

seller

Brooke's next-door neighbor allows Brooke to run a driveway over his land. The​ grantor-neighbor's land is now a​ ______________ estate with regard to the easement.

servient

A nonmanager member of a​ manager-managed limited liability company​ (LLC) is treated equally to a​ ________.

shareholder

Owners of a corporation who elect the board of directors are​ ________.

shareholders

In a​ member-managed limited liability company​ (LLC), each member has the right to ​ ________.

sign contracts on behalf of the LLC

A(n) ___________ on a negotiable instrument can be any symbol that is​ (1) handwritten,​ typed, printed,​ stamped, or made in almost any other manner and​ (2) executed or adopted by a party to authenticate a writing.

signature

Groups of laws that regulate the​ formation, operation and dissolution of a corporation are called​ ________.

state corporation codes

A form of​ co-ownership of real property that can be used only by married couples is known as which of the​ following?

tenancy by the entirety

A form of​ co-ownership in which the interest of a surviving tenant in common passes to the deceased​ tenant's estate and not to the​ co-tenants is known as​ ________.

tenancy in common

Express powers of a corporation are granted by all of the following sources of law​ EXCEPT?

the Revised Model Business Corporation Act​ (RMBCA)

The United Nations Convention on Contracts for the International Sale of Goods​ (CISG) applies to contracts for the international sale of goods when​ ________.

the buyer and seller have their places of business in different nations and both nations are signatories of the CISG

Who is liable for a​ corporation's debts and​ obligations?

the corporation

Monthly benefits under disability insurance policies are usually based upon​ _________.

the degree of disability incurred by the insured

If an owner entrusts possession of his or her goods to a merchant who deals in goods of that​ kind, the merchant has the power to transfer all rights​ (including title) in the goods to a buyer in the ordinary course of business. This is known as​ ___________.

the entrustment rule

Which of the following is a​ seller's obligation?

to deliver conforming goods

Transferors of negotiable instruments can be held liable for​ ________.

transfer warranties only

A(n) ________ is a person who is on a​ landowner's or​ tenant's real property but has no​ invitation, permission, or legal right to be there.

trespasser

ABC​ Corporation's Board of Directors votes to award a corporate procurement contract to Company A.​ However, the CEO signs a corporate procurement contract with Company​ B, without corporate authority to do so. This is an example of​ a(n) ____________.

ultra vires act

Insurance is a contract whereby one party​ (the insurer or​ _____________) indemnifies another against the​ loss, damage, or liability that may arise from some​ event, distributing the risk of this loss between the parties to the contract.

underwriter

Which of the following is NOT a universal​ defense?

undue influence

An exception that permits a type of building or use in an area that would not otherwise be allowed by a zoning ordinance is known as​ a(n) ________.

variance

When does the UCC apply to a mixed sale​ transaction?

when goods are the predominant part of the transaction

When does an umbrella policy make a pay​ out?

when primary policy limits on other insurance policies have been exceeded

When can a buyer obtain specific performance from a​ seller?

when the goods are unique

Bob and Jim​ (both merchants) orally agree to a lease contract for some heavy equipment. Shortly​ thereafter, Jim sends Bob a written confirmation of the lease they agreed to. Bob ignores the written notice and fails to perform his obligations under the lease a month later. Bob argues they do not have a valid contract under the statute of frauds because he did not sign anything. Jim prevails in a lawsuit under what UCC​ rule?

written confirmation rule

If a member withdraws from a term limited liability company prior to the expiration of the​ term, this is considered​ ________.

wrongful disassociation

A​ _______ usually formulates zoning​ ordinances, conducts public​ hearings, and makes recommendations to the city​ council, which must vote to enact an ordinance.

zoning commission

Local laws that are adopted by municipalities and local governments to regulate land use within their boundaries are known as​ ________.

zoning ordinances

Sarah gets into an automobile accident and her car suffers​ $5,000 of damage. She has automobile insurance for​ $10,000 dollars with a​ $1,000 dollar deductible. How much does Sarah have to pay to get her car​ fixed?

​$1,000

________ insurance is insurance that protects directors and officers from liability for decisions and actions they take on behalf of the corporation.

​Directors' and​ officers'

​________ insurance is insurance that protects directors and officers from liability for decisions and actions they take on behalf of the corporation.

​Directors' and​ officers'

________is title to real property that is free from any encumbrances or other defects that are not disclosed but would affect the value of the property.

Marketable title

More than​ ________ countries have signed the Convention on Contracts for the International Sale of Goods​ (CISG).

90

​________ is issued by a land court that determines the rightful owner of real property.

A certificate of title

Regarding dissolution of a limited liability company​ (LLC), all of the following statements are true​ EXCEPT?

A disassociating​ member's duties of loyalty and care to the LLC do not terminate upon disassociation from the LLC.

In which of the following scenarios would a limited liability partnership​ (LLP) be liable for the tortious conduct of the​ partner?

A partner is on their way to deposit the​ LLP's monthly receipts at its bank and negligently causes an automobile accident that injures another person.

​________ is a chronological history of the chain of title affecting the​ property, including recorded documents and public records relating prior ownership of the property.

An abstract of title

More than 50 percent of the publicly traded corporations in the United States are incorporated in​ ________.

Delaware

_________ means relating to technology having​ electrical, digital,​ magnetic, wireless,​ optical, electromagnetic, or similar capabilities.

Electronic

__________ means a computer program or an electronic or other automated means used independently to initiate an action or respond to electronic records or performances in whole or in​ part, without review or action by an individual.

Electronic agent

What is the rule adopted by the Federal Trade Commission that eliminates holder in due course status with regard to negotiable instruments that arise out of certain consumer credit​ transactions?

FTC HDC Rule

Once the seller tenders delivery of the​ goods, what is the​ buyer's general​ obligation?

to accept and pay for the goods

An S corporation election is made by filing form 2553 with the​ ________.

Internal Revenue Service

Which of the following statements about standard fire insurance is​ true?

It can be expanded to cover damage from windstorms via a rider.

Which of the following is true about the Convention for the International Sale of Goods​ (CISG)?

It does not require a sales contract to be in writing.

What is the importance of the Menendez v.​ O'Niell to​ corporations?

It reinforced the general rule that a corporation is a distinct legal​ entity, separate from the individuals who comprise​ it, and individual shareholders are not liable for the debts of the corporation.

John's Equipment Rentals enters into a lease contract with ABC Construction for a backhoe to use in a yearlong excavation project. The backhoe is delivered to the construction​ site, but is a different size than that agreed to in the lease contract. During the night and before ABC can address the​ non-conformance, the backhoe is vandalized. Who bears the risk of loss for the​ damages?

John's Equipment​ Rentals, since the goods were​ non-conforming

Margaret owns a house that burned down. Who does NOT have insurable interest in the​ house?

Margaret's mother, to whom Margaret owes money

Hillary enters into a shipment contract with a dress manufacturer for fifty red dresses. The dress manufacturer sends fifty blue dresses. The dresses are damaged during shipment. Who bears the risk of loss and​ why?

The dress​ manufacturer, because the goods are​ non-conforming

Which of the following statements is NOT true regarding makers of​ notes?

The holder must take certain actions to give rise to the​ maker's obligation to pay.

When a nonnegotiable contract is transferred by​ assignment, which of the following is NOT​ true?

The nonnegotiable contract is converted into a negotiable instrument and is subsequently subject to Article 3 of the UCC.

Which of the following statements is false regarding forged​ indorsements?

There are no exceptions to the general rule that the loss falls on the party who first takes the forged instrument after the forgery.

What is the limited liability of​ shareholders?

They are only liable to the extent of their capital contributions to the corporation.

________ is bought by purchasers of real estate to ensure that they will be paid for losses suffered by defects in the title to the property that occurred prior to the purchase or loan.

Title insurance

​________ is bought by purchasers of real estate to ensure that they will be paid for losses suffered by defects in the title to the property that occurred prior to the purchase or loan.

Title insurance

________ insurance is additional insurance that provides coverage in excess of the basic policy limits of other insurance policies.

Umbrella

In a limited liability​ partnership, who is liable for the debts of the​ partnership?

only the limited partners up to their capital contribution

Legal Grounds​ Café LLC, a limited liability company owned by two​ members, may be taxed as a​ _________.

partnership

Under article 2 of the Uniform Commercial​ Code, what is a​ sale?

passing of title of goods from a seller to a buyer for a price

A major advantage of a corporation is​ ________.

the free transferability of shares

The party who transfers an ownership interest in real property is known as​ ________.

the grantor

Grandma writes a check to her​ granddaughter, Christy. Another​ granddaughter, Devin, steals the​ check, forges​ Christy's signature, and cashes it at the local grocery store. Who is​ liable?

the grocery store

If the name of the payee or indorsee is misspelled in a negotiable instrument​ ________.

the indorsee can indorse the check using the misspelled​ name, the correct​ name, or both

Which of the following is NOT covered by home​ owners' insurance?

the items of a neighbor destroyed by the owner of the insurance

The Delaware corporation code benefits large corporations because​ ________.

the legislature keeps amending the code as the demands of big business warrant such changes

All of the following are requirements in order for the court to confirm a Chapter 13 plan of payment​ EXCEPT?

the plan must require payments for at least ten years

Types of debt that can be discharged in a Chapter 7 bankruptcy include​ ________.

the remaining unpaid debt after Chapter 7 liquidation

To prevail under the attractive nuisance​ doctrine, plaintiff must prove all of the following factors EXCEPT​ __________.

the utility of the defendant maintaining the condition and the burden of eliminating the danger were equal compared to the risk to children

A limited liability company can be liable for​ ________.

the wrongful act or omission of a member acting within the ordinary course of business

The chancery court in Delaware is an advantage for corporations because​ ________.

there are no juries

Who would NOT subject a limited liability partnership​ (LLP) to liability if they caused loss or injury to a third party while acting in the ordinary course of business for the​ LLP?

the​ LLP's landlord

John's Equipment Rentals enters into a lease contract with ABC Construction for a backhoe to use in a yearlong excavation project. Under the​ UCC, ___________.

this is considered an ordinary​ lease, with​ John's Equipment Rentals bearing the risk of loss until ABC actually receives the leased goods

Insurance that owners of real property purchase to ensure that they have clear title to the property is known as​ ________ insurance.

title

Legal tangible evidence of ownership of goods is called​ ________.

title


Ensembles d'études connexes

Managerial Accounting CHAPTER FOUR

View Set

Criminal Law - CRJ1400 - Chapter 5

View Set

Principles of Marketing Chapter 4 Lab questions

View Set

( HA Ch 5) PrepU - Cultural and Spiritual Assessment

View Set

Key emergency management theories

View Set