ACCT 340 - Practice Exam 3
Which of the following is an INCORRECT statement regarding independent contractors? A. As a general rule, employees are independent contractors. B. Doctors commonly act as independent contracts. C. A principal can authorize an independent contractor to enter into contracts. D. If a client authorizes an attorney to settle a case within a certain dollar amount and the attorney does so, the settlement agreement is binding. E. Certified public accountants commonly act as independent contractors.
A. As a general rule, employees are independent contractors.
Which of the following statements about a life insurance contract is true? A. If no beneficiary is named, the proceeds go to the insured's estate. B. The owner is not considered to be a party to the contract. C. The beneficiary is the person whose life is insured. D. If no beneficiary is named, the owner receives all of the premiums back. E. The insured is the one who receives the proceeds from the policy.
A. If no beneficiary is named, the proceeds go to the insured's estate.
______________ means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form. A. Record B. Electronic chattel paper C. Financing statement D. Retention of the collateral E. Disposal of the collateral
A. Record
Congress enacted the _________________ to allow the shareholders of some corporations to avoid double taxation. A. Subchapter S Revision Act B. Uniform Commercial Code C. Securities Exchange Act D. C Corporation Act E. Revised Uniform Limited Partnership Act
A. Subchapter S Revision Act
A principal-_____ relationship is formed when an employer hires an employee and gives that employee authority to act and enter into contracts on his or her behalf. A. agent B. incidental beneficiary C. third party beneficiary D. assignee E. bailee
A. agent
Which of the following is NOT a requirement for creating a negotiable instrument? A. be part of a commercial transaction B. be an unconditional promise or order to pay C. be signed by the maker or drawer D. be payable on demand or at a definite time E. state a fixed amount of money
A. be part of a commercial transaction
In the context of a limited liability partnership (LLP), a continuation agreement ________. A. expressly sets forth the events that allow for extension of the limited liability partnership upon dissociation and dissolution B. must be filed at the secretary of state's office of the state of organization of a limited liability partnership to form the LLP C. can be used by accountants, lawyers, doctors, and other designated professionals to form and operate a business entity and has the benefits and attributes of an LLP D. sets up the rules of the business entity when it is formed and is important evidence of the agreed upon operating terms of the business entity E. governs the affairs and business and the relations among members, managers, and the business entity
A. expressly sets forth the events that allow for extension of the limited liability partnership upon dissociation and dissolution
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 __________. A. immediately request an adequate assurance of performance B. do nothing and see if ABC performs as contracted C. immediately sue for a decree of specific performance D. immediately repudiate the contract E. immediately cancel the contract
A. immediately request an adequate assurance of performance
In many situations, a principal and an agent do not expressly create an agency. Instead, the agency is inferred from the conduct of the parties. This type of agency is referred to as a(n) _____ agency. A. implied B. express C. reserved D. durable E. general
A. implied
A security interest can be obtained by the creditor in the goods without filing a financing statement when the creditor has ________. A. possession of collateral B. filed a financing statement C. a termination statement D. no money E. attachment
A. possession of collateral
A person who organizes and starts a corporation is a ________. A. promoter B. member C. limited partner D. CEO E. general partner
A. promoter
Google, Inc. is an example of a ________________ corporation. A. publicly held B. public C. professional D. nonprofit E. closely held
A. publicly held
Who bears the risk of loss during shipment in a destination contract? A. seller B. carrier C. financing company D. buyer E. consignee
A. seller
In a noncarrier case, if a sales or lease contract does not expressly state the place of delivery, where will the buyer or lessee pick up the goods? A. seller's place of business B. the buyer is never required to pick up the goods in a noncarrier case C. carrier's location D. the airport E. buyer's place of business
A. seller's place of business
Express powers of a corporation are granted by all of the following sources of law EXCEPT? A. the Revised Model Business Corporation Act (RMBCA) B. articles of incorporation C. state statutes D. by-laws of a corporation E. state constitutions
A. the Revised Model Business Corporation Act (RMBCA)
If an agent is offered a business opportunity that is meant for the principal and the agent takes advantage of it, this is known as ________. A. usurping an opportunity B. misuse of confidential information C. dual agency D. competing with the principal E. self-dealing
A. usurping an opportunity
An S corporation election is made by filing form 2553 with the ________. A. Consumer Financial Protection Bureau B. Internal Revenue Service C. Secretary of State's office D. Federal Trade Commission E. Securities and Exchange Commission
B. Internal Revenue Service
________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. A. Quiet title B. Marketable title C. Title insurance D. An abstract of title E. A certificate of title
B. Marketable title
All of the following are examples of transfer warranties made by any person who transfers a negotiable instrument for consideration, EXCEPT? A. The instrument has not been materially altered. B. That there are no defenses of any party that are good against the transferee. C. That there are no defenses of any party that are good against the transferor. D. All signatures are genuine or authorized. E. The transferor has good title to the instrument or is authorized to obtain payment or acceptance on behalf of one who does have good title.
B. 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)? A. LLPs are taxed as corporations. B. The LLP is a domestic LLP in the state in which it is organized. C. LLPs are enacted by federal law. D. An LLP cannot do business in states other than where it is organized. E. The use of the LLP form of business has no restrictions as to business types.
B. The LLP is a domestic LLP in the state in which it is organized.
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? A. The carrier, because of its duty to protect goods in shipment B. The dress manufacturer, because the goods are non-conforming C. Hillary, because there has been substantial compliance by the dress manufacturer D. The dress manufacturer, because this is a shipment contract E. Hillary, because this is a shipment contract
B. The dress manufacturer, because the goods are non-conforming
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? A. Ted B. all of them will receive the same number of votes C. Marshall D. Susan E. Ted and Susan
B. all of them will receive the same number of votes
The duration of a limited liability company (LLC) is ________. A. always a term LLC B. at-will C. never a term LLC D. always a perpetual LLC E. 10 years
B. at-will
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. A. key-person life B. business interruption C. workers' compensation D. directors' and officers' E. product liability
B. business interruption
Property insurance that insures an automobile from loss or damage due to causes other than collision is known as ________ insurance. A. automobile liability B. comprehensive C. uninsured motorist D. collision E. medical
B. comprehensive
The FTC HDC rule eliminates holder in due course status with regard to negotiable instruments in ____________ transactions. A. real estate B. consumer C. banking D. bankruptcy E. commercial
B. consumer
An instrument that describes a person's ownership interest in a piece of real property is known as a ________. A. license B. deed C. permit D. warrant E. bailment
B. deed
The right to receive a fixed dividend at set periods during the year is known as ________. A. redeemable stock B. dividend preference C. liquidation preference D. ownership of common stock E. cumulative dividend right
B. dividend preference
Olivia signs a document giving her sister the authority to act on her behalf while she undergoes surgery. This is known as a(n) _____. A. implied agency B. durable power of attorney C. agency by ratification D. special power of attorney E. general power of attorney
B. durable power of attorney
Camila is a first time home buyer. She goes to her local bank to get a loan to buy the house that allows her to put only 3% down. The loan covers 97% of the purchase price and the costs to close on the house. In reviewing the loan documents, Camila reads that her interest rate is 5% to be paid monthly over 30 years. If the at the end of 5 years Camila can choose to add another 2 years onto the loan, the loan agreement contains a(n) _____. A. maker clause B. extension clause C. acceleration clause D. prepayment penalty E. prepayment clause
B. extension clause
A holder in due course is a holder who takes a negotiable instrument ___________________. A. subject to some of the claims and none of the defenses that can be asserted against the transferor B. free of all claims and most defenses that can be asserted against the transferor C. subject to all the claims and defenses that can be asserted against the transferor D. free of all claims and defenses that can be asserted against the transferor E. subject to all the claims and some of the defenses that can be asserted against the transferor
B. free of all claims and most defenses that can be asserted against the transferor
To qualify as a professional corporation, Medical Clinic, P.C., must meet all of the following qualifications EXCEPT? A. grant all shareholders voting rights B. have at least thirty-five shareholders C. have a board of directors D. file articles of incorporation with the secretary of state E. be a corporation formed by professionals
B. have at least thirty-five shareholders
When does a seller have a right to reclaim the goods? A. if the lessor is in default B. if the seller discovers that the buyer is insolvent C. if the seller is in default D. if the buyer disposes of the goods E. if the buyer accepts the goods
B. if the seller discovers that the buyer is insolvent
A(n) ______________ is implied at the time of contracting if the seller or lessor makes a statement that the goods will serve this purpose. A. express warranty B. implied warranty of fitness for a particular purpose C. implied warranty of merchantability D. implied warranty of fitness for human consumption E. warranty disclaimer
B. implied warranty of fitness for a particular purpose
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. A. only in a foreign country B. individual C. inside director D. general partner E. corporation
B. individual
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. A. grantee B. invitee C. grantor D. trespasser E. licensee
B. invitee
A form of co-ownership that includes the right of survivorship is known as ________. A. an easement B. joint tenancy C. tenancy in common D. a bailment E. a life estate
B. joint tenancy
American Airlines buys a $50 million airplane from Boeing. If American signs a promissory note that promises to pay Boeing if it is "satisfied" with the airplane, does this meet the requirement of a negotiable instrument? A. yes - it is a promise or order to pay B. no - the promise is conditional C. yes - it is for a fixed amount D. no - it is not for a fixed amount E. yes - it is in writing
B. no - the promise is conditional
Maya buys a car from Santiago for $10,000. If Maya signs a promissory note that promises to pay Santiago if the car passes an emissions inspection, the document would be _____. A. negotiable - it is in writing B. nonnegotiable - the promise is conditional C. nonnegotiable - it is not for a fixed amount D. negotiable - it is a promise or order to pay E. negotiable - it is for a fixed amount
B. nonnegotiable - the promise is conditional
A(n) _______ fails to meet the requirements of a negotiable instrument and, therefore, is not subject to the provisions of UCC Article _______. A. promissory note; 3 B. nonnegotiable contract; 3 C. negotiable contract; 2 D. nonnegotiable contract; 2 E. negotiable contract; 3
B. nonnegotiable contract; 3
In a limited liability partnership, who is liable for the debts of the partnership? A. only shareholders B. only the limited partners up to their capital contribution C. both general partners and limited partners D. only general partners E. only members
B. only the limited partners up to their capital contribution
Who bears the risk of loss during shipment in a sale on approval? A. financing company B. seller C. buyer D. carrier E. consignee
B. seller
The party who transfers an ownership interest in real property is known as ________. A. a donee B. the grantor C. the grantee D. a donor E. a bailor
B. the grantor
A limited liability company can be liable for ________. A. the wrongful act or omission of a third party B. the wrongful act or omission of a member acting within the ordinary course of business C. the acts of a partner D. the acts of no one E. the acts of a shareholder
B. the wrongful act or omission of a member acting within the ordinary course of business
Whose actions create an apparent agency? A. the third party beneficiary's B. the principal's C. the incidental beneficiary's D. the intermediary's E. the agent's
B. the principal's
When can a lessee obtain specific performance from a lessor? A. anytime B. when the goods are unique C. when the lessee does not want to pay a seller for the same goods D. when the seller's shipment is late E. when damages are not enough
B. when the goods are unique
If a member withdraws from a term limited liability company prior to the expiration of the term, this is considered ________. A. partnership B. wrongful disassociation C. a notice of dissolution D. payment of distributional interest E. winding up
B. wrongful disassociation
What section of the UCC governs sales contracts? A. Article 3 B. Article 5 C. Article 2 D. Article 2A E. Article 4
C. Article 2
Which of the following is an INCORRECT statement regarding recording statutes? A. The filing of a deed of trust in the county recorder's office in the county in which the real property is located is public record and alerts the world that the deed of trust has been recorded against the real property. B. The filing of a mortgage in the county recorder's office in the county in which the real property is located is public record and alerts the world that the mortgage has been recorded against the real property. C. As a general rule, it is not necessary to record a mortgage or deed of trust in the county recorder's office. D. The non-recordation of a mortgage does not affect the legality of the instrument between the mortgagor and the mortgagee. E. The mortgagor is obligated to pay the amount of the mortgage according to the terms of the mortgage, even if the document is not recorded.
C. As a general rule, it is not necessary to record a mortgage or deed of trust in the county recorder's office.
A corporation that does not qualify for or has not elected be taxed as an S corporation is a ________. A. limited liability company B. general partnership C. C corporation D. sole proprietorship E. joint venture corporation
C. C corporation
Because lenders are sometimes reluctant to lend large sums of money simply on the borrower's promise to repay, many lenders take a security interest in the property purchased or some other property of the debtor. _____ secures payment of a secured loan. A. A contract obligation B. A promise C. Collateral D. Income E. An ethical obligation
C. Collateral
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? A. $23,334 B. $5,000 C. $10,000 D. $0 E. $28,334
D. $0
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? A. 0 dollars B. $10,000 C. $5,000 D. $1,000 E. $2,500
D. $1,000
In which of the following scenarios would a limited liability partnership (LLP) be liable for the tortious conduct of the partner? A. While on lunch break at a cafe, a partner breaks another customer's nose during a heated argument. B. Driving home from the LLP holiday party, a partner becomes distracted and sideswipes several parked cars on the side of the road. C. Bicycling home from work, a partner doesn't see a pedestrian crossing the street and accidently hits and injures them. D. 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. E. On the way to work, a partner stops by a retailer and signs a contract to purchase a new appliance for his home on credit but ultimately fails to make any payments.
D. 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.
A corporation with more than 100 shareholders would automatically be considered a(n) ________. A. sole proprietorship B. joint venture corporation C. limited liability company D. C corporation E. S corporation
D. C corporation
More than 50 percent of the publicly traded corporations in the United States are incorporated in ________. A. Maryland B. Alabama C. Massachusetts D. Delaware E. Connecticut
D. Delaware
________ are often used to finance international trade and facilitate import-export transactions. A. Finance leases B. Standby letters of credit C. Lease contracts D. Letters of credit E. Electronic sales contracts
D. Letters of credit
What is the limited liability of shareholders? A. They have unlimited liability for the corporation's obligations but limited liability for corporate debts based on the amount of their capital contributions. B. Their liability is only limited by the amount of their personal net worth. C. They are personally liable for all debts incurred by the corporation, but not its obligations. D. They are only liable to the extent of their capital contributions to the corporation. E. Their personal liability for the corporation's debts is limited by their capital contribution to the corporation.
D. They are only liable to the extent of their capital contributions to the corporation.
Which of the following is NOT covered by personal liability insurance? A. personal injuries caused by the insured's immediate family off the property of the insured B. personal injuries caused by the insured off the property of the insured C. property damaged on the property of the insured D. any injuries the insured sustains off the property of the insured E. personal injuries that occurred on the property of the insured
D. any injuries the insured sustains off the property of the insured
The number of shares provided for in the articles of incorporation are called ________. A. issued shares B. the par value of stock C. unissued shares D. authorized shares E. participating preferred stock
D. authorized shares
Which of the following is NOT a benefit of having a uniform commercial law across the states? A. uniformity B. consistency C. predictability D. disparity E. equality
D. disparity
A form of co-ownership of real property that can be used only by married couples is known as which of the following? A. tenancy in common B. an easement C. joint tenancy D. tenancy by the entirety E. a life estate
D. tenancy by the entirety
The United Nations Convention on Contracts for the International Sale of Goods (CISG) applies to contracts for the international sale of goods when ________. A. the buyer and seller have their places of business in the same nation and that nation is a signatory of the CISG B. the buyer and seller have their places of business in different nations but neither nation is a signatory of the CISG C. the buyer and seller have their places of business in different nations and one nation is a signatory of the CISG D. the buyer and seller have their places of business in different nations and both nations are signatories of the CISG E. the buyer and seller have their places of business in the same nation but neither nation is a signatory of the CISG
D. the buyer and seller have their places of business in different nations and both nations are signatories of the CISG
To be negotiable, a promise or an order must be _____. Question content area bottom A. hypothetical B. conditional C. theoretical D. unconditional E. situational
D. unconditional
What article of the UCC governs the formation of leases? A. Article 4 B. Article 3 C. Article 5 D. Article 2 E. Article 2A
E. Article 2A
Texas Car Sales, Inc., a new car dealership, finances all its inventory of new automobiles at Horns Bank. Horns Bank takes a security interest in the dealership's inventory of cars and perfects this security interest. Tyrone, a buyer in the ordinary course of business, purchases a car from the dealership for cash. If the dealership defaults on its payments to the bank, ________. A. Horns Bank can recover the car from Tyrone B. Tyrone must return the car if he knew of the perfected security interest C. the dealership can recover the car from Tyrone D. the bank can recover the car if Tyrone sells it to a good faith purchaser E. Horns Bank cannot recover the car Tyrone bought
E. Horns Bank cannot recover the car Tyrone bought
An owner of a vacant lot enters into an agency agreement with a real estate agent to sell the lot for $1 million based on the agent's market analysis. After signing the agreement, the agent learns that oil has been discovered on the property, a discovery that makes the land worth $5 million. Which of the following is true? A. The agency terminates because of impossibility of performance. B. The agency terminates by operation of law. C. The owner of the lot must sell the land for $1 million. D. The agency does not terminate because it would be a wrongful termination. E. The agency may be terminated because of this change in circumstances.
E. The agency may be terminated because of this change in circumstances.
The bankruptcy court has the power to void certain fraudulent transfers of a debtor's property made by the debtor within ______ year(s) prior to filing a petition for bankruptcy. A. Three B. Four C. One D. Five E. Two
E. Two
Saachi, who owns a piece of vacant real estate, hires Maaksharth, a licensed real estate broker, to list the property for sale. Ian, an adjacent property owner to Saachi's property, tells the agent that a chemical plant has polluted his property and probably Saachi's property. The owner is unaware of any pollution and the agent does not tell her. If Saachi sells the property to Mabina and it is later discovered that the property Mabina bought from Saachi is polluted, would Saachi be liable? A. Yes, Saachi has committed fraud B. No, the buyer had a duty to discover the pollution C. No, only the agent can be held liable D. Yes, Saachi was negligent in not conducting an environment survey before listing the property E. Yes, the agent's knowledge is imputed to Saachi
E. Yes, the agent's knowledge is imputed to Saachi
A member of a limited liability company (LLC) is personally liable for ________. A. nothing; only partners have liability B. all debts and obligations of the LLC C. nothing; only shareholders have liability D. performing the contracts an LLC enters into E. debts and obligations of an LLC up to the amount of their capital contribution
E. debts and obligations of an LLC up to the amount of their capital contribution
A writ of _________ is a court order directing a sheriff or other government officials to _________ that is in the debtor's possession and authorizes a judicial sale of that property. A. attachment; post a bond with the court B. execution; post a bond with the court C. attachment; seize the debtor's property D. garnishment; seize the debtor's property E. execution; seize the debtor's property
E. execution; seize the debtor's property
A disclaimer of an implied warranty of merchantability must specifically mention the term __________________ in the disclaimer. A. fitness for human consumption B. implied warranty C. a particular purpose D. express warranty E. merchantability
E. merchantability
A holder in due course takes the negotiable instrument free from ______ defenses. A. no B. real C. personal and universal D. universal E. personal
E. personal
What is an addition to a home owners' policy that covers specific valuable items known as? A. medical payment insurance B. automobile liability C. comprehensive insurance D. collision insurance E. personal articles floater
E. personal articles floater
An agency can be legally terminated in all EXCEPT which of the following ways? A. if a specific purpose is achieved B. the mutual assent of the parties C. the occurrence of a stated event D. if a stated time has elapsed E. ratification of the contract by the principal
E. ratification of the contract by the principal
A Chapter 11 bankruptcy is known as a(n)______________. A. liquidation B. involuntary petition C. automatic stay D. extension E. reorganization
E. reorganization
A major advantage of a corporation is ________. A. the board of directors who run the corporation's day-to-day operations B. the distributed management among partners C. it is subject to double taxation D. its fixed existence E. the free transferability of shares
E. the free transferability of shares
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) ____________. A. agency by ratification B. promoter's contract C. express power D. implied power E. ultra vires act
E. ultra vires act
In a member-managed limited liability company (LLC), each member has the right to ________. A. purchase the shares of the other managers B. act as a general partner C. sign contracts on behalf of the LLC D. nothing; only the manager can sign a contract E. sell its stock in the company
C. sign contracts on behalf of the LLC
Types of debt that can be discharged in a Chapter 7 bankruptcy include ________. A. unscheduled claims B. a debt that would result in a benefit to the debtor that outweighs the detrimental consequences to a spouse, former spouse, or child of the debtor C. the remaining unpaid debt after Chapter 7 liquidation D. all fines and penalties payable to federal, state, and local governmental units E. an amount owned to a pension, profit-sharing, or stock bonus plan, and loans owed to employee retirement plans
C. the remaining unpaid debt after Chapter 7 liquidation
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? A. the LLP's CEO B. an LLP partner C. the LLP's landlord D. the LLP's CFO E. the LLP's receptionist
C. the LLP's landlord
Insurance that owners of real property purchase to ensure that they have clear title to the property is known as ________ insurance. A. renters' B. comprehensive C. title D. collision E. health
C. title
A principal is liable for an agent's actions _________________. A. when an agent commits an intentional tort outside the scope of his or her authority B. under no circumstances C. when the agent is negligent when acting within the scope of his or her authority D. under the "coming and going" rule E. when an agent is on a frolic and detour
C. when the agent is negligent when acting within the scope of his or her authority
Lars draws a check made "pay to the order of Yasmin Aslan." Yasmin signs the back of the check and cashes the check at the grocery store. Has the check been negotiated? A. no, it was not indorsed B. no, it has not been delivered C. yes, Yasmin indorsed and delivered it D. no, Yasmin must take the check to the bank E. no, Yasmin must indorse it to a third party
C. yes, Yasmin indorsed and delivered it
Irene, a college student, wants to purchase a new BMW automobile. She goes to Auto Dealer and finds exactly the car she wants, and she wants to finance the car. Auto Dealer will not sell the car to Irene on credit based on Irene's own credit standing. Auto Dealer requires Irene to find a co-signer for the purchase and credit contract. Irene asks her mother to agree to pay the debt if she defaults. If Irene's mother signs such a document, this is known as a ________. Irene's mother ________ on the loan. A. writ of attachment; is not liable B. surety arrangement; is primarily liable C. guaranty arrangement; is secondarily liable D. writ of garnishment; is secondarily liable with Irene E. writ of execution; is primarily liable with Irene
C. guaranty arrangement; is secondarily liable
After a debtor's default, if the proceeds from the disposition of collateral are not sufficient to satisfy the debt to the secured party, the debtor has _________ liability to the secured party for the payment of the deficiency. A. tort B. joint and several C. personal D. strict E. limited
C. personal
Power of _____ is a power stated in a mortgage or deed of trust that permits _____ without court proceedings and sale of the property through auction. A. attorney; reconveyance B. sale; execution C. sale; foreclosure D. sale; remuneration E. attorney; reclamation
C. sale; foreclosure
A nonmanager member of a manager-managed limited liability company (LLC) is treated equally to a ________. A. general partner B. a corporate director C. shareholder D. limited partner E. sole proprietor
C. shareholder
Owners of a corporation who elect the board of directors are ________. A. general partners B. sole proprietors C. shareholders D. members E. limited partners
C. shareholders
What is the importance of the Menendez v. O'Niell to corporations? A. It promulgated the Model Nonprofit Corporation Act (MNCA), which provides comprehensive and modern law for the formation, operation, and dissolution of nonprofit corporations. B. It completely revised the Model Business Corporation Act and issued the Revised Model Business Corporation Act (RMBCA). C. 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. D. It stated that "a corporation is an artificial being, invisible, intangible, and existing only in the contemplation of law. Being the mere creature of the law, it possesses only those properties which the charter of its creation confers upon it, either expressly or as incidental to its very existence." E. It held that corporations cannot commit treason, nor be outlawed, nor excommunicated, for "they have no souls."
C. 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.
Which of the following about independent contractors is true? A. Independent contractors usually work for one client. B. If someone is named an independent contractor in a contract, the degree of control that the principal has over the contractor is irrelevant. C. Labeling someone an independent contractor is only one factor in determining status. D. Independent contractors usually use the principal's tools. E. Principals control the performance of an independent contractor's work.
C. Labeling someone an independent contractor is only one factor in determining status.
Which of the following is NOT true of the buyer's right to inspect? A. Non-conforming goods can be rejected by the buyer. B. The terms of the inspection can be agreed to by the parties. C. The cost of inspection is always borne by the buyer. D. The cost of the inspection is borne by the seller if the goods are non-conforming. E. It must take place at a reasonable time and place and within a reasonable manner.
C. The cost of inspection is always borne by the buyer.
Which of the following statements is NOT true regarding makers of notes? A. The maker is obligated to pay a note according to its original terms. B. Makers of promissory notes and certificates of deposit have primary liability for the instruments. C. The holder must take certain actions to give rise to the maker's obligation to pay. D. The maker unconditionally promises to pay the amount stipulated in the note when it is due. E. The maker is absolutely liable to pay the instrument, subject only to certain universal (real) defenses.
C. The holder must take certain actions to give rise to the maker's obligation to pay.
Which of the following statements is false regarding forged indorsements? A. Where an indorsement on an instrument has been forged, the loss falls on the party who first takes the forged instrument after the forgery. B. If the imposter forges the indorsement of the named payee, the drawer is liable on the instrument to any person who, in good faith, pays the instrument. C. There are no exceptions to the general rule that the loss falls on the party who first takes the forged instrument after the forgery. D. A drawer is liable on a forged indorsement when the person identified as the payee is a fictitious person. E. A drawer is liable on a forged indorsement if the person signing as a drawer intends the named payee to have no interest in the instrument.
C. There are no exceptions to the general rule that the loss falls on the party who first takes the forged instrument after the forgery.
In order to amend the articles of organization for New Navy, LLC, ________. A. the operating agreement must be revoked B. any member can amend the articles of organization C. all members must vote to amend the articles of organization D. the members can do nothing; the Articles of Agreement cannot be amended E. at least one member must sign a document of agreement
C. all members must vote to amend the articles of organization
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 ________. A. a negotiable instrument B. a member resolution C. an operating agreement D. an LLC agreement E. a shareholder resolution
C. an operating agreement
The articles of incorporation ________. A. can be amended by a vote by the shareholders alone B. are created by the contractor C. are the basic governing documents of a corporation D. are a legal necessity filed by the courts E. can be amended by a vote of the board of directors alone
C. are the basic governing documents of a corporation
When can a debt collector contact a debtor? A. at church, mosque, or synagogue B. prior to 8:00 AM C. between 8:00 AM and 9:00 PM D. when the debtor is represented by an attorney E. after 9:00 PM
C. between 8:00 AM and 9:00 PM
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. A. quiet B. clouded C. clear D. encumbered E. allodial
C. clear
A sight draft is also called a _____ draft. A. qualified B. statutory C. demand D. reserve E. conditional
C. demand
