BUS 206 Exam 4
A complete termination comes about only after the partnership has been_______ and its affairs have been wound up. a. dissolved b. disillusioned c. standardized d. reorganized e. finalized
A
______________ takes place when the principal behaves as if he has the intent of ratifying an unauthorized agreement. a. implied ratification b. real ratification c. delayed ratification d. express ratification e. explicit ratification
A
"Yellow-dog" contracts, in which employees agree not to join a union as a condition of employment, were made unlawful by: a. the Landrum-Griffin Act b. the Norris-La Guardia Act c. the Taft-Hartley Act d. the Civil Rights Act of 1964 e. the Wagner Act
B
A certification of incorporation from the government: a. Gives a business monopoly privileges b. Is necessary for a corporation to be recognized legally c. Must be obtained by all limited partnerships d. Is necessary or a corporation to be recognized legally and must be obtained by all limited partnerships e. None of the other choices
B
A person doing business for himself or herself is a(n): a. single proprietor b. sole proprietor c. only proprietor d. partner e. general proprietor
B
A business's ___________ refers to its ability to continue to operate in the event of the death, retirement, or other incapacity of an owner of the business. a. perpetuity b. lifetime c. duration d. experience e. continuation
C
A company that has more than $25,000 worth of business with the federal government and does not notify employees that as a condition of employment, the employer must be notified of any drug-related convictions that occur, and the employer must notify the federal government would be in violation of: a. the Drug Prohibition Act b. the Drug Control in the Workplace Act c. the Drug-Free Workplace Act d. the Zero Tolerance Act e. the Drug Prevention in the Workplace Act
C
An agent has a ____________________ the funds and property of his principal that have been entrusted to him or have come into his possession. a. duty to compensate for b. duty to reimburse c. duty to account for d. duty to document e. duty to increase
C
An anti-raiding covenant is one in which: a. one party promises not to sue another in case of an injury caused by a tort or some other event b. an employee agrees not to leave and go into competition against the employer or go to work for a competitor for a certain time c. an employee agrees not to recruit fellow employees for another company when they leave their current place of employment d. an employee agrees not to use illegal substances e. none of the other choices are correct
C
A limited liability company: a. is taxed like a partnership b. has the liability of a corporation c. is taxed like a corporation d. is taxed like a partnership and has the liability of a corporation e. is taxed like a corporation and has the liability of a corporation
D
A manager who runs all aspects of a hotel is most likely what kind of agent: a. universal agent b. special agent c. gratuitous agent d. general agent e. none of the other choices
D
An at-will employee: a. may not be dismissed for any reason b. may only be dismissed for committing a major crime c. may only be dismissed for certain reasons specified in the employment contract d. may be dismissed at any time without reason or cause e. none of the other choices are correct
D
Wrongful discharge is a: a. felony b. minor misdemeanor c. major misdemeanor d. tort e. civil crime
D
. Lois was the agent of Lester, who owned a store in Walton, Iowa. While Lester was away on vacation, the Mississippi River reached record flood. As an agent, Lois only had permission to engage in sales at the store and purchase certain items. Faced with the prospect of losing all goods, Lois shipped Lester's inventory to a storage facility 200 miles away, out of the path of the flood waters. This incurred costs, but saved the inventory. Lois acted in: a. violation of her duty of loyalty b. violation of her duty of obedience c. violation of her duty of accounting d. accordance with her duty of accounting e. accordance with her duty of reasonable care
E
A disclosed principal is a principal whose identity is: a. known to the agent b. unknown to the agent c. unknown to third parties to contracts entered into with the agent d. known to partners e. known to third parties to contracts entered into with the agent
E
A franchise is sold by: a. a franchisor b. a franchisee c. a franchise director d. the Franchise Trade Association e. none of the other choices
A
When liability is imposed on the principal for the unauthorized torts of an agent, it is called: a. vicarious liability b. indemnification c. agent respondeat d. third-party rights, duties, and liabilities e. none of the other choices
A
When there is an undisclosed principal, the agent is: a. liable to the third party for the principal's nonperformance of the contract b. not liable to the third party for the principal's nonperformance of the contract c. liable to the undisclosed principal for the third party's nonperformance of the contract d. liable for only half of the damages incurred by the principal's nonperformance of the contract e. none of the other choices are correct
A
Which of the following is an advantage to having the ability to use agents: a. access to the expertise of agents b. reduced tax burden c. exemption from income tax d. creation of many small companies within one larger company e. easier organization of a company
A
Unlike a corporation, a limited liability company is: a. allowed perpetual life b. not allowed perpetual life c. allowed to exist for more than five years d. not allowed to exist for more than five years e. none of the other choices are correct
B
When an agency is terminated: a. the agent's authority to act for the principal does not end b. the agent's authority to act for the principal ends c. the agent's authority to act for the principal is reduced to very limited conditions d. the agent may never work with the principal again e. the agent may not work for someone who is in competition with the principal
B
Partners in a partnership owe each other: a. Direct interest responsibility b. A duty to contribute direct assets c. A fiduciary duty d. A duty of ordinary care e. None of the other choices
C
The _____ is the most common way for employers to verify a prospective employee's legal right to work in the United States. a. I-5 form b. I-8 form c. I-9 form d. I-12 form e. Department of Justice Employment Form 9
C
The business organization that has at least one general partner and other investors who have limited liability is a: a. corporation b. general partnership c. limited partnership d. limited liability company e. proprietorship
C
The document that sets forth the rights and obligations of the franchisor and franchisee is known as the: a. Franchise contract b. Franchise list c. Franchise agreement d. Franchise document e. Agreement of franchisel
C
The governing committee of a corporation is the: a. Board of presidents b. President c. Board of directors d. Board of shareholders e. Board of managers
C
The owners of a corporation are called: a. partners b. officers c. shareholders d. principals e. none of the other choices
C
There are two types of dissolution of a corporation: a. abstract and remote b. real and abstract c. voluntary and involuntary d. finite and indefinite e. none of the other choices
C
Unless its articles of incorporation provide for a specified period of duration, a corporation has: a. total existence b. permanent existence c. perpetual existence d. final existence e. existence of perpetual durationl
C
Which of the following is not a benefit category of workers' compensation: a. medical expenses b. total disability c. punitive damages for gross injury d. temporary partial disability e. all of the other specific choices are benefits categories
C
Which of the following statements about a corporation is true? Corporations are not entitled to constitutionally protected: a. free speech b. equal protection c. privileges against self-incrimination d. freedom from unreasonable searches and seizures e. none of the other choices are true
C
Which of the following workers would not be covered by the FMLA: a. an employee who is among the 50 percent highest paid b. an employee who had only been employed for 18 months c. an employee who had worked fewer than 2,000 hours in the past year d. an employee who had not worked at all for at least a year e. all of the other specific choices are correct
D
An agency may not be ended by: a. unilateral notice by the agent b. unilateral notice by the principal c. mutual consent by agent and principal d. lapse of agreed-upon time e. decision of a third party opposed to the agency
E
The articles of incorporation usually provide all of the following except: a. name of the corporation b. names of all shareholders c. name of the registered agent d. classes of stock being issued e. all of the other choices must be provided
E
Which class of employees is not covered by the NLRA: a. managers b. independent contractors c. government workers d. managers and independent contractors e. managers and independent contractors and government workers
E
Which of the following are public-policy exceptions recognized by most states as limits to the employment-at-will doctrine allowing termination of employees? a. refusing to commit an illegal act b. performing a public duty (reporting for jury duty) c. exercising a right (filing for workers' compensation) d. refusing to commit an illegal act and performing a public duty (reporting for jury duty) e. refusing to commit an illegal act and performing a public duty (reporting for jury duty) and exercising a right (filing for workers' compensation)
E
A general partnership is: a. An association of two or more persons to carry on a business as co-owners for a profit b. An association of two or more companies that help each other with business, but do not share profits c. An understanding between a supplier and a distributor d. A merger of two corporations e. None of the other choices are correct
A
A reason the corporate status is often chosen is: a. corporations have the status of a legal person b. the Civil Rights Act of 1964 does not apply to corporations c. shareholders have the right to instruct management d. directors are immune from liability suits e. none of the other choices are true
A
An _________ is one whose identity is unknown by the third party at the time when a contract is entered into with an agent. a. undisclosed principal b. disclosed principal c. specific principal d. legitimate principal e. clear principal
A
An employer could be held liable for negligence in hiring if: a. they hire a person who could be expected to possibly cause problems b. they hire a person who has no criminal record c. they hire a person who owns property with liens on it d. they hire a person who has never had a job before e. they hire a person without a college degree
A
Apparent authority arises when: a. the principal creates an appearance of authority in an agent that leads a third party to conclude reasonably that the agent has authority to act for the principal b. the agent creates an appearance of authority in a principal that leads a third party to conclude reasonably that the agent has authority to act for the principal c. the agent forges documents conferring authority on himself d. the principal gives the agent implied authority e. none of the other choices are correct
A
Employees may be required to sign, as a condition of employment, an agreement that they will not leave the company and go to work for themselves or a competitor firm in a position that could inflict competitive injury on the employer. This is called: a. noncompete agreement b. anti-raiding covenant c. exculpatory agreement d. whistle-blower agreement e. none of the other choices
A
Federal_______ requirements were initiated in 1938 as part of the Fair Labor Standards Act. a. minimum wage b. maximum wage c. working hour requirements d. workplace safety standards e. none of the other choices are correct
A
If a payment amount is not specified in the agency agreement, a principal's duty to compensate means that the principal must pay the agent: a. for the reasonable value of the services provided b. at least half the customary rate c. for the rational value of the services provided d. however much the agent demands e. however much the agent's attorney demands
A
If an employer and employee agree on employment of a certain time, or that job security will be provided, then there is likely: a. an express contract b. an implied contract c. an implied covenant of good faith d. nothing more than employment at-will e. none of the other choices
A
In Armstrong v. Food Lion, the Armstrongs were beaten by employees of a grocery store. They sued the store. The South Carolina high court held that the store was not liable because: a. the employees were not acting within the scope of their employment or in furtherance of Food Lion's business when they attacked the Armstrongs b. the employees were acting within the scope of their employment or in furtherance of Food Lion's business when the attacked they Armstrongs c. the employees had only worked for Food Lion for 6 months when they attacked the Armstrongs d. the employees had worked for Food Lion for more than 6 months when they attacked the Armstrongs e. the employees were not servants of Food Lion when they attacked the Armstrong
A
In a sole proprietorship, the capital usually: a. Must come from the owner's own resources or be borrowed b. Comes from the government c. Comes from investors d. Comes from the stock market e. Comes from taxes
A
Limited partners are investors who: a. may not participate in management of the business b. are liable for all debts of the limited partnership c. may take an active role in the management of the business d. all of the other specific choices e. none of the other choices
A
The articles of incorporation usually include all of the following except: a. name of the CEO b. address of the corporation c. purpose of the business d. classes of stock to be issued e. all of the other choices are included
A
The authority given by the principal to an agent, conferring on the agent the power and right to change the principal's legal status is referred to as: a. actual authority b. authority in rem c. authority at law d. general authority e. special authority
A
The dissolution of a partnership occurs: a. when an event takes place that precludes the partners from continuing in business b. during the process of completing any unfinished business of the partnership c. during the collection and distribution of the partnership's assets d. when a certificate of limited partnership is executed e. none of the other choices
A
When a court holds shareholders personally liable for corporate debts it is said to be: a. "piercing the corporate veil" b. "opening the corporate veil" c. "closing the corporate veil" d. "tearing the corporate veil" e. "cutting the corporate veil"
A
When a principal accepts the consequences of the activities of a person who had previously not been the principal's agent, the principal: a. ratifies the agency b. reissues the agency c. delimits the agency d. cancels the agency e. exposes the agency
A
Which of the following things should be stated in a company's substance abuse policy: a. why the tests are done b. the drug employees most commonly test positive for c. what percentage of employees test positive on average d. all of the other specific choices should be stated in a company's substance abuse policy e. none of the other specific choices should be stated in a company's substance abuse policy
A
Which of the following was one of the first OSHA health standards developed: a. protection from exposure to asbestos b. protection from exposure to coke-oven emissions c. protection from exposure to too much sun d. protection from exposure to vinyl chloride e. none of the other choices are correct
A
Workers' compensation law: a. provides a sure set of benefits for injuries instead of relying on tort litigation b. applies only to accidents that conform to a specified set of allowable work-related injuries c. holds employees responsible for reimbursing employers for the cost of injuries for which employees are at fault d. is a federal program that is mandatory for nearly all workers e. all of the other choices
A
A disadvantage of the sole proprietorship form is often: a. business profits are taxed to the owner personally b. the owner is personally liable for all the business debts c. the owner has sole responsibility for control, liabilities, and management d. the record keeping formalities of the business are within the owner's discretion e. none of the other choices
B
A person who volunteers with no expectation of being paid for her services is a(n): a. exceptional agent b. gratuitous agent c. agent who has an agency coupled with an interest d. one-time agent e. none of the other choices
B
A random drug test would be most likely to be justified by an employer for: a. a grocery store clerk b. a truck driver c. a student d. a movie ticket seller e. all of the other choices as federal law encourages testing all employees
B
A written partnership agreement typically specifies the following except: a. the ownership interests of the partners b. that the partnership will be established under federal or state law c. the name of the partnership business d. the procedures for dissolution of the partnership e. the method of accounting to be used
B
An agent must perform instructions provided by the principal. If the agent fails to do so, he violates: a. the duty of cooperation b. the duty of obedience and performance c. the duty to reimburse d. the duty of loyalty e. the duty of accounting
B
Because of the duty to inform, an agent must: a. be able to show where money or property comes from and goes to b. record all transactions related to the agency c. engage in acts that could lead to personal liability d. perform responsibilities with the degree of care that a reasonable person would exercise under the circumstances e. none of the other choices are correct
B
In Callison v. City of Philadelphia, where Callison was told that while on FMLA leave that he had to be at home during work hour unless he called to report where he would be going, he sued to protest the policy. The court of appeals held that: a. even though there is nothing in the FMLA that prevents employers from ensuring that employees on leave do not abuse their leave, the City's call-in policy did violated Callison's FMLA rights b. since there is nothing in the FMLA that prevents employers from ensuring that employees on leave do not abuse their leave, the City's call-in policy did not violate any of Callison's FMLA rights c. the FMLA does not allow employers to check on employees who are on sick leave so the City's call-in policy was illegal d. the City's call-in policy was a requirement of the FMLA and Callison should be fined for violating it e. the City's call-in policy was legal, but suspending Callison for violating it was not
B
In Cove Management v. AFLAC, Galgano, an independent contractor who solicited insurance business for AFLAC, rented office space from Cove under AFLAC's name. When Galgano defaulted on payments, Cove sued AFLAC contending that Galgano was its agent when he rented the office, so AFLAC was liable. The appeals court held that AFLAC: a. was not obligated to the lease because real estate deals must be in writing with the principal of the company agreeing to the lease b. was not obligated to the lease because Galgano did not have apparent authority to sign a lease that would bind AFLAC c. was obligated on the lease as its employee had apparent authority d. was not obligated on the lease, but its employee who told Galgano it was ok to enter into such a lease was obligated e. all of the other choices are correct
B
Jimmy must be at work no later than 7 AM on the days he works. Because he must hurry to get to work, he runs over a lady going across the street. She sues Jimmy and his employer for her injuries. She has: a. no case unless she was in a crosswalk going with the light b. a case against Jimmy, but no case against his employer c. a case against Jimmy and against his employer under vicarious liability d. a case against Jimmy's employer if Jimmy is found to be negligent, such liability means that Jimmy would not be personally liable e. a right to seek worker's compensation if she was walking to work
B
Scott is an agent for Lee and his duties require him to fly to Chicago from Cleveland. Scott gets up late and misses his flight to Chicago so he has to buy a second plane ticket. As principal, Lee: a. has a duty to reimburse Scott for the second plane ticket b. does not have a duty to reimburse Scott for the second plane ticket because it was Scott's fault he had to buy it c. has a duty to reimburse Scott for half the plane ticket d. has a duty to reimburse Scott for 1/3 of the plane ticket e. does not have a duty to reimburse Scott for the ticket because he had no duty to reimburse Scott for a plane ticket to Chicago anyway
B
The business judgment rule: a. is applied when directors of a corporation act negligently b. protects directors and managers of a corporation who have made honest mistakes in judgment c. is used by courts to impose strict liability on directors and managers when violated d. protects directors and managers of a corporation who have made honest mistakes in judgment and is used by courts to impose strict liability on directors and managers when violated e. none of the other choices
B
The company name, the address of the company or its registered agent, the names and addresses of company members and whether any members are to be liable for company debts are all included in a limited liability company's: a. articles of institution b. articles of organization c. articles of incorporation d. articles of sale e. articles of administration
B
The duties of a principal to an agent do not include: a. cooperating with the agent b. allowing the agent "significant discretion" c. reimbursing the agent for any reasonable expense d. indemnifying the agent for legal liability incurred in completing the purpose of the agency e. all of the other choices are required
B
The independent contractor is distinguished by: a. the extent of the compensation b. the extent of control the employee retains over work performance c. the extent of control the employer retains over work performance d. all of the other specific choices are correct e. none of the other specific choices are correct
B
The principal's duty to reimburse dose not cover expenses: a. incurred during business hours b. incurred due to the agent's misconduct or negligence c. incurred by the agent while conducting business for the principal d. incurred while traveling to do business for the principal e. none of the other choices are correct
B
When an employee reports an employer's illegal act it is referred to as: a. defamation b. whistle blowing c. tattle-tailing d. whistle calling e. horn blowing
B
A board of directors' fiduciary duty of loyalty requires that: a. directors are morally upstanding people in their personal lives b. directors do whatever is necessary to make a profit c. directors place the interests of the corporation before their own interests d. directors place their own interests before the interests of the corporation e. none of the other choices are correct
C
An employment of an agent for the purpose of representation in establishing relations between a principal and third parties is known as a(n): a. third party relationship b. principal relationship c. agency relationship d. real relationship e. representative relationship
C
Dissolution of a partnership takes place, unless otherwise provided for by contract, in the following instances except: a. Bankruptcy of a partner b. Withdrawal of a partner c. Change in financial condition of a partner d. Death of a partner e. All of the other choices would require dissolution
C
Employers may be liable for torts of employees that can be attributed to negligent hiring or supervision under the rule of law known as: a. contractor liability b. tortious liabilitius c. respondeat superior d. principal duty e. there is no such rule as the employee only is responsible
C
In Bearden v. Wardley Corp., where Bearden sued Wardley because one of its agents, Gritton, bought a house from her and then cheated her on the transaction, the court held that: a. Gritton was liable for breaching his duty to Bearden, but Wardley had no knowledge of Gritton's actions so was not liable b. Gritton was liable for theft, but not for breach of his duty as an agent to Bearden, since that relationship expired before Gritton cheated Bearden c. Gritton and Wardley violated their fiduciary obligations to Bearden, so both are liable d. neither party was liable to Bearden because the contract was legitimate and her claim that she had been cheated by her agent, Gritton, was unfounded e. none of the other choices
C
In most states a limited partnership does not have to file what information with the appropriate state official? a. Name of the business b. Names and addresses of all partners c. Contributions each partner has made d. The share of profits to be paid to each partner e. All of the other choices must be filedl
C
Insuring an agent against losses suffered during the course of authorized transactions is part of the principal's: a. duty of cooperation b. duty of facilitation c. duty to indemnify d. duty to protect e. duty to reimburse
C
Many states now allow groups of doctors in practice together to form a particular legal entity allowed by statute called: a. a limited liability company b. a cooperative c. a professional corporation d. a limited partnership e. a physician association
C
Many states require agencies for _________ to be established in writing. a. sale of boats b. sale of businesses c. sale of land d. sale of livestock e. sale of books
C
An agency is created when an agent agrees to act for, or in place of, the: a. third party b. representative c. shareholder d. principal e. none of the other choices are correct
D
An agency through operation of law is established: a. by a written contractual agreement of the parties b. by ratification of the agent's activities by the principal c. by the application of the doctrine of estoppel d. when an emergency exists and the "agent's" actions are in the public interest e. none of the other choices
D
An agent with authority to represent the principal only for a specific transaction, usually for a limited time is a(n): a. universal agent b. gratuitous agent c. agent who has an agency coupled with an interest d. special agent e. none of the other choices
D
In France v. Southern Equipment Co., where France, after falling off a roof, sued Southern Equipment Co. who had employed Quality Metal Roof, a company that contracted with France's employer, Royalty Builders, to build them a new metal roof for exposing him to the inherently dangerous job of roofing, the appeals court held that: a. Southern Equipment was liable because they engaged Royalty Builders to do the work b. Southern Equipment was not liable because they engaged Royalty Builders to do the work and in doing so passed the liability to Royalty Builders c. Southern Equipment was liable even though they did not engage Royalty Builders to do the work d. Southern Equipment was not liable because they did not engage Royalty Builders to do the work and they had no control over Royalty Builders e. Southern Equipment was not liable because France was a minor and should not have been working in construction
D
Jeanette and Maia form a partnership. Their business is successful, but after a few years Maia decides she wants to quit and sell her partnership share to another financial manager, with Jeanette's approval. What will the legal consequences of this act be? a. Maia cannot legally sell her share of the business because it has no a market value b. Maia's sale of her partnership share will be legally invalid because the partnership is the legal creature of Jeanette c. Maia may sell her partnership share, but must continue to be a silent partner in the business d. Maia may sell her partnership share; this will result in termination of the partnership and formation of a new one e. Maia must become a limited partner in the business and allow Jeanette to become the dominant, general partner
D
Jeanette decides to go into business with her friend Maia. Richard suggests that the two establish a partnership to carry on their business. If they do, this means both: a. Are co-owners of the business b. Share control over the profits of the business c. Have limited liability for the debts of the business d. Are co-owners of the business and share control over the profits of the business e. Are co-owners of the business and share control over the profits of the business and have limited liability for the debts of the business
D
Shareholders of a corporation: a. manage the corporation b. delegate responsibility for management to hired managers c. elect all vice presidents of the corporation d. vote on matters that may effect a change in the corporation's structure e. issue the employment rules of a corporation
D
Which of the following could lead to the dissolution of a partnership: a. Withdrawal of a partner b. Death of a partner c. Bankruptcy of a partner d. All of the other specific choices are correct e. None of the other specific choices are correct
D
Which of the following determines the scope of authority given to an agent: a. statements of the principal b. the principal's conduct c. the trade customs in business d. all of the other specific choices are correct e. none of the other specific choices are correct
D
A limited liability company may be terminated: a. by the retirement of a member b. by the death of a member c. by the consent of all members d. by the expulsion of a member e. by any of the other choices
E
The_______ was created to monitor unfair labor practices and assure that union representation elections are fair. a. National Worker Relations Board b. National Employee Relations Board c. National Union Relations Board d. National Workplace Relations Board e. none of the other choices are correct
E
Through an agency relationship, the agent becomes a representative of the: a. third party b. customer or supplier of the principal c. shareholder d. all of the other choices e. none of the other choices
E
Under ERISA, all employees are eligible for participation in a company's employee benefit plans if the employee: a. works full-time b. is over eighteen c. has worked for the company for at least one year d. works full time and is over eighteen e. works full time and has worked for the company for at least one year
E
Which of the following is a right of a limited partner in a limited partnership: a. the right to make hiring decisions b. the right to give performance reviews to employees c. the right to take an active role in managing the business d. both a and b are rights of a limited partner e. none of the other specific choices are rights of a limited partner
E
Which of the following is not a category of agents covered in the text: a. gratuitous agent b. special agent c. universal agent d. general agent e. all of the other choices are covered
E
Which of the following is not a duty owed by the agent to the principal: a. loyalty b. reasonable care c. accounting d. notification e. all of the other choices are required
E
Which of the following must be contained in a certificate of limited partnership under the Uniform Limited Partnership Act: a. Name of the business b. Type or character of the business c. The address of an agent who is designated to receive legal process d. Duration of the limited partnership e. All of the other choices are correct
E
_____________ consists of oral or written instructions given by the principal to an agent a. substitute authority b. legal authority c. implied authority d. quasi authority e. none of the other choices are correct
E
lThe_________ are the "rules" that regulate and govern the internal operations of the corporation. a. The certificate of incorporation b. The bond c. The corporate constitution d. Statutes of business e. None of the other choices are correct
E
