ACCT 324 Exam 2 Quiz Questions

Which of the following is not a requirement for a partnership under the Uniform Partnership Act (UPA)? Multiple Choice An association of two or more persons The intent to make a profit Must make a profit As co-owners

Must make a profit

In a consolidation, which corporation(s) continue(s) to exist legally? Multiple Choice Only the older corporation Neither of the original corporations Both original corporations Only the corporation with more assets

Neither of the original corporations

________ act as agents of the corporation, and thus the rules of agency apply to their work. Multiple Choice Stockholders Directors Officers Lenders

Officers

According to the Uniform Partnership Act (UPA), the distribution of liquidated assets must proceed in which order? Multiple Choice Payment to partners of the capital they invested, payments to creditors of the partnership, payments of refunds or repayment of loans to partners for loans made to the partnership, payments of profits distributed based on the partnership agreement. Payment of refunds or repayment of loans to partners for loans made to the firm, payments to creditors of the partners

Payments to creditors of the partnership, payments of refunds or repayment of loans to partners for loans made to the partnership, payments to partners of the capital they invested, and payments of profits distributed on the basis of the partnership agreement.

________ give preference to shareholders to purchase shares of a new issue of the corporation's stock before it is offered to the public. Multiple Choice Preferred stock rights Preemptive rights Inspection rights Common stock rights

Preemptive rights

Which of the following is not a characteristic of a corporation? Multiple Choice Perpetual existence Corporate liability for torts and crimes of agents Centralized management separate from owners Unlimited liability of shareholders

Unlimited liability of shareholders

A dissenting shareholder has a right to have his/her shares appraised and to receive monetary compensation from the corporation for their value. This is referred to as a(n) ________. Multiple Choice accounting equity right appraisal right buyout

appraisal right

Corporations have only those powers granted to them in their ________ and through state incorporation statutes. Multiple Choice articles of incorporation articles of authorization articles of agreement articles of corporate authority

articles of incorporation

According to the Revised Uniform Limited Partnership Act (RULPA), when the objective established in the certificate is complete, limited partnerships can:blank Multiple Choice be dissolved. be extended. continue as is. be limited.

be dissolved.

If a principal ________, a durable power of attorney given by the principal to an agent is not affected. Multiple Choice becomes incapacitated dies dies without a will dies intestate

becomes incapacitated

When multiple shareholders have suffered damages caused by the same act of a corporation, the shareholders can bring a ________ suit against the corporation. Multiple Choice shareholders derivative preemptive declaratory class action

class action

Criteria for determining whether an agent is an employee or an independent contractor does not include: Multiple Choice whether the worker engages in a distinct occupation. whether the employer provides the tools. how the worker is paid. fiduciary duty status.

fiduciary duty status.

A corporation is a(n) ________ corporation in those states in which it conducts business but is not incorporated. Multiple Choice state domestic foreign alien

foreign

Jorge enters into an agreement with Victoria, an interior designer, to remodel his house. Once Victoria has completed designing and decorating the house, she no longer has the authority to act on Jorge's behalf. Under the given circumstances, the agency terminated due to: Multiple Choice impossibility. renunciation by the agent. fulfillment of purpose. lapse of time.

fulfillment of purpose.

When a partnership rightfully dissolves, all the partners can do each of the following acts except: Multiple Choice unanimously agree to continue the business of the partnership. immediately withdraw their shares of partnership property. participate in the process of winding up. demand the partnership be wound up.

immediately withdraw their shares of partnership property.

When a partner enters into agreements necessary to carry on the partnership business, that partner has exercised his or her ________. Multiple Choice estoppel authority express authority apparent authority implied authority

implied authority

A principal has a duty to ______ the agent for any losses the agent incurs in the course of working on behalf of the principal. Multiple Choice account to pay wages to compensate indemnify

indemnify

An ________ is a person who contracts with another to do something for another person but who is not controlled by the other nor subject to the other's right to control with respect to his or her physical conduct in the performance of the undertaking. Multiple Choice employee apparent agent independent contractor independent employee

independent contractor

Directors can be classified as _____________, ________, ________, and ________. Multiple Choice affiliated, unaffiliated, proxy, representative allied, unallied, linked, connected officer, shareholder, inside, affiliated inside, outside, affiliated, unaffiliated

inside, outside, affiliated, unaffiliated

A partnership is considered a ________ of the partners such as when partnership debts become the debts of the individual partners. Multiple Choice legal entity sole proprietorship legal aggregate non-legal aggregate

legal aggregate

Once a partnership has been ____________, the partners begin the process of _______________. Multiple Choice liquidated; winding up terminated; dissolution performed; redistribution dissolved; liquidation

liquidated; winding up

An agent has not breached the duty of ________ if the principal gives unlawful or unethical instructions. Multiple Choice compensation loyalty obedience performance

obedience

A ________ is an association of two or more persons to carry on as co-owners a business for profit. Multiple Choice cooperative corporation sole proprietorship partnership

partnership

A court may apply the ________ to find a corporate officer criminally liable regardless of the extent to which the officer took part in any criminal activity. Multiple Choice responsible person doctrine rochdale principles internal affairs doctrine doctrine of ultra vires

responsible person doctrine

If a partner dies, his or her partnership property transfers to the remaining partners under the ________blank. Multiple Choice right of survivorship covenant of agreement assignment allocation right of partnership transfer

right of survivorship

A(n) ________ main liability is for the extent of their investment when the company loses money. Multiple Choice shareholder's unaffiliated director's inside director's officer's

shareholder's

Agency contracts do not need to be in writing unless an agent has been given power of authority or if the agent will be entering into a contract that the ______ requires to be in writing. Multiple Choice statute of frauds ratification agreement expressed authority implied covenant

statute of frauds

Promoters begin the corporate creation and organization process by arranging for necessary capital, financing, and licenses. They raise capital for the infant corporation by making ________ agreements with ________ who agree to purchase stock in the new corporation. Multiple Choice partnership; limited partners subscription; subscribers script; scribes licensing; licensees

subscription; subscribers

Linda hires Roy to build a shed in her backyard. Before Roy begins, the city council passes a law making it illegal to build storage units on any property in the city. The new law _______ the agency agreement. Multiple Choice conditionalizes extends terminates limits

terminates

When a partner withdraws or is expelled according to a partnership agreement, dissolution by ________ has occurred. Multiple Choice a partnership at will the operation of the law the partner's act the act of the court

the partner's act

Limited partners ________ their limited liability if they participate in the control of the business. Multiple Choice will not surrender may increase will surrender may not terminate

will surrender

Which of the following statements is true of the liability of incoming partners? Multiple Choice A new partner assumes limited liability for any obligations that occurred before he or she was added. The capital a new partner adds cannot be used to pay off debts that occurred before he or she was added. A new partner has no liability for any obligations that occurred before he or she was added. A new partner can be held personally liable for the obligations that occurred before he or she was ad

A new partner assumes limited liability for any obligations that occurred before he or she was added.

When a partner commits a tort or breach of trust, all partners who are jointly and severally liable may be responsible for: Multiple Choice 50% of the judgment, regardless of percentage of liability. 100% of the judgment, regardless of percentage of liability. 75% of the judgment, regardless of percentage of liability. their share of the judgment only.

100% of the judgment, regardless of percentage of liability.

If Corporation A combines with Corporation B such that only Corporation A continues to exist, what has occurred? Multiple Choice A consolidation A merger A combination A joiner

A merger

When can a principal be liable for the crime of an agent? Multiple Choice If the principal authorized the criminal act If the principal did not authorize the criminal act Under any circumstances Under no circumstances

If the principal authorized the criminal act

Which of the following statements regarding a special power of attorney is true? Multiple Choice A special power of attorney grants the agent implied authority over all of the principal's business, but it becomes effective only upon the principal's incapacity. A special power of attorney grants the agent express authority over all of the principal's business. A special power of attorney grants the agent express authority over specifically outlined acts. A special power of attorney termin

A special power of attorney grants the agent express authority over specifically outlined acts.

Which of the following is required for an agency by ratification to be effective? Multiple Choice An individual must misrepresent their identity as an agent for another party. The principal must have some knowledge of all facts regarding the implied contract. A principal must choose which parts of the agent's acts to ratify and which to reject. The principal may ratify some parts of the agent's acts or all parts of the agent's act.

An individual must misrepresent their identity as an agent for another party.

Which of the following is a document providing basic information about the corporation? Multiple Choice Articles of incorporation Bylaws Shareholder agreement Resolutions

Articles of incorporation

Which term used by the Uniform Partnership Act (UPA) means the partnership is voluntary and consensual? Multiple Choice Alliance Partnership Association Interaction

Association

A leveraged buyout occurs when a group within a corporation (usually management) does which of the following? Multiple Choice Sells all privately held corporate stock Buys all outstanding corporate stock held by the public Accumulates a beachhead acquisition Merges with another corporation

Buys all outstanding corporate stock held by the public

Partners complete the winding-up stage by which of the following methods? Multiple Choice By working for the benefit of the partnership in accordance with the partnership agreement By taking account of the assets of the partner who has left and redistributing them among the other partners When any partner stops fulfilling the role of a partner to the business by default When any partner stops fulfilling the role of a partner to the business by choice

By taking account of the assets of the partner who has left and redistributing them among the other partners

What are the rules and regulations that govern the corporations' internal management called? Multiple Choice Article of incorporation Bylaws Incorporation laws Articles of organization

Bylaws

If an agency misrepresents themselves, a third party can do which of the following? Multiple Choice Cancel the contract and be compensated for any money lost The third party has no recourse. Hold only the agent liable if the principal authorized the agent to engage in an act Cancel the contract but not be compensated for any money lost

Cancel the contract and be compensated for any money lost

According to the doctrine of respondeat superior, corporations are liable for which of the following? Multiple Choice Corporations are liable for the torts and crimes committed by their agents during the scope of their employment. Corporations are liable only for the crimes committed by their officers. Corporations are liable only for the torts committed by their agents. Corporations are liable for the torts and crimes committed by their agents at any time in any place.

Corporations are liable for the torts and crimes committed by their agents during the scope of their employment.

Why, by operation of laws, does an agency agreement terminate if the agent, unknown to the principal, acquires interest against the principal's interest? Multiple Choice Changed circumstances Disloyalty of agent Occurrence of a specific event Revocation of authority

Disloyalty of agent

Which power of attorney is intended to continue beyond the principal's incapacitation? Multiple Choice General power of attorney Perpetual power of attorney Durable power of attorney Special power of attorney

Durable power of attorney

The most influential power of shareholders is to do which of the following? Multiple Choice Appoint and supervise officers Elect and remove directors Authorize corporate policy decisions Make financial decisions for a corporation

Elect and remove directors

________ is perhaps the most important consideration a court makes when determining whether a worker is an employee or an independent contractor. Multiple Choice Employer control Implied agency Employee pay Tax law

Employer control

Which of the following statements is true of the liquidation phase of termination? Multiple Choice In cases of voluntary dissolution, courts automatically appoint a receiver to handle liquidation duties. Liquidation is the process by which the shareholders convert the corporation's assets into cash and distribute the money among themselves. In cases of voluntary dissolution, liquidation duties fall on the board of directors. The liquidation phase of termination begins before dissolution takes

In cases of voluntary dissolution, liquidation duties fall on the board of directors.

If a director or officer makes a decision that benefits other companies with which they have a relationship, this person has engaged in which of the following activities? Multiple Choice Investing Self-dealing Self-indulgence Affiliating

Self-dealing

When an asset purchase occurs, which of the following is true regarding the acquiring corporation assuming the liabilities of the selling corporation? Multiple Choice The acquiring corporation will assume the liabilities of the selling corporation if the sale occurs under fraudulent circumstances. Asset purchases never involve the acquiring corporation assuming the selling corporation's liabilities. The acquiring corporation will assume the liabilities of the selling corporation if the agree

The acquiring corporation will assume the liabilities of the selling corporation if the sale occurs under fraudulent circumstances.

Which of the following is not a procedural requirement for a merger or consolidation? Multiple Choice The shareholders of all involved corporations must approve the plan by a vote at a shareholder meeting. The involved corporations must submit the merger or consolidation plan to the secretary of state. The boards of directors of all involved corporations must approve the merger or consolidation plan. The officers of all involved corporations must approve the plan by a super-majority vote.

The officers of all involved corporations must approve the plan by a super-majority vote.

Which of the following statements is true when a partnership is dissolved? Multiple Choice The remaining partners may continue the partnership, but only by filing revised articles of organization with the Secretary of State in the state where the majority of the remaining partners reside. The remaining partners may choose to continue the partnership. The remaining partners must continue the partnership. The remaining partners must wind up the partnership.

The remaining partners may choose to continue the partnership.

Which of the following statements is not true of promoters? Multiple Choice They prepare a corporation's incorporation papers. They begin the corporate creation and organization process. They are agents of infant corporations. They can enter into contracts as needed.

They are agents of infant corporations.

A target corporation may defend itself by having a group within the corporation (usually management) purchase all the corporation's outstanding stock held by the public. This defense strategy is called __________. Multiple Choice an exchange tender offer a leveraged buyout an accumulation of shares proxy solicitation

a leveraged buyout