Acct 340 Final

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The Tax Reform Act of 1976 imposes all EXCEPT which of the following​ penalties?

strict liability for the understatement of a​ client's tax obligation

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

the grantor

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

According to the Revised Model Business Corporation Act​ (RMBCA), the articles of incorporation must include which of the​ following?

the name and address of each incorporator

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

transfer warranties only

When can a lessee obtain specific performance from a​ lessor?

when the goods are unique

In a​ _________, a seller delivers the goods to a buyer to sell on his or her behalf.

consignment

The FTC HDC rule eliminates holder in due course status with regard to negotiable instruments in​ ____________ transactions.

consumer

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

court of chancery

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

criminal dissolution

​A(n) _____ clause provides that insurance proceeds are payable only after the insured has paid a certain amount of the damage or loss.

deductible

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

dividend preference

A signature in the lower right hand portion of a check indicates that the signer is the​ _______.

drawer of the check

​A(n) _____ clause prevents insurers from contesting statements made by insureds in applications for insurance after the passage of a stipulated number of years.

incontestability

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

joint tenancy

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.

What is the difference between Chapter 7 and Chapter 13​ bankruptcy?

Chapter 13 requires debtors to pay some of their future income to pay off prepetition​ debts, while Chapter 7 does not require it.

Which of the following is an INCORRECT statement regarding the corporation as a legal​ person?

Corporations are not separate legal persons.

Which of the following is an INCORRECT statement regarding the duration of a​ corporation's existence?

Corporations automatically expire twenty​ (20) years after the secretary of​ state's issuance of a certificate of incorporation unless the owners of the corporation expressly petition the secretary of state for a renewal of the corporate charter.

Which of the following is NOT true about ownership in fee simple absolute​ (or fee​ simple)?

If a person owns real property in fee​ simple, that ownership may end on the occurrence of a future event.

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.

Which of the following is an INCORRECT statement regarding agency authority to bind an LLC to​ contracts?

In a​ manager-managed LLC,​ non-manager members can bind the LLC to contracts.

Which of the following is NOT true about​ workers' compensation​ insurance?

In most​ instances, the injured employee can sue the employer for liability if the​ workers' compensation award is too low.

Which of the following is NOT true about a​ cooperative?

Individual residents may secure loans for the units they occupy.

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.

Which of the following is NOT a characteristic of a​ corporation?

It is not a separate legal entity.

Which of the following is an INCORRECT statement regarding a life​ estate?

The person who is given a life estate is called the proprietor.

​________ 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

​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 this is an ordinary lease

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

​Margaret's mother, to whom Margaret owes money

Victims of a securities fraud perpetrated by a firm suffer​ $1 million in damages. The accountants for the firm are found to be 10 percent​ liable, although they did not knowingly participate in the fraud. What​ amount, if​ any, would the accountants owe to the​ plaintiffs?

​$100,000; accountants are liable to their proportionate degree of fault

How many states recognize a form of​ co-ownership known as community​ property?

9

Which of the following is NOT true about a limited liability partnership​ (LLP)?

A certificate of limited liability partnership is a private document.

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

A certificate of title

Which of the following is an INCORRECT statement regarding incorporation​ procedure?

A corporation can be in incorporated in more than one state.

Which of the following statements about voluntary dissolution is NOT​ true?

A corporation cannot be voluntarily dissolved.

Which of the following is an INCORRECT statement regarding Delaware corporation​ law?

A corporation must do business in Delaware in order to obtain the benefits of Delaware corporation law.

Which of the following is an INCORRECT statement regarding corporate​ management?

A corporation usually has a decentralized management.

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

authorized shares

Which of the following is NOT a type of real​ property?

automobiles

What is a finance​ lease?

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

Which of the following is an INCORRECT statement regarding​ members' and​ managers' duty of care to a limited liability company​ (LLC)?

A manager of a​ manager-managed LLC does not owe a fiduciary duty of loyalty to the​ LLC, since he or she is not a member.

Which of the following is an INCORRECT statement regarding​ members' and​ managers' duty of loyalty to a limited liability company​ (LLC)?

A manager of a​ manager-managed LLC does not owe a fiduciary duty of loyalty to the​ LLC, since he or she is not a member.

Which of the following is NOT true about the Racketeer Influenced and Corrupt Organizations Act​ (RICO)?

Accountants cannot be named as defendants in lawsuits that assert violations of RICO.

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

An order paper is negotiated by​ ________.

both delivery and indorsement

Universal defenses can be raised against​ ________.

both holders in due course and holders

An LLC is formed by members​ John, Alicia, and Margaret. They designated the LLC as​ manager-managed and appoint Alicia and nonmember Robert as its managers. Who has the authority to bind the LLC to​ contracts?

Alicia and​ Robert, because they are the managers of the LLC

Which of the following is an INCORRECT statement regarding​ manager-managed LLCs?

All actions concerning the LLC can be delegated to managers.

Which of the following is NOT true regarding accounting malpractice​ (negligence)?

An accountant is relieved of liability if he or she can prove they followed applicable​GAAP, GAAS,​ and/or IFRS.

Which of the following is NOT true about incontestability​ clauses?

An incontestability clause prevents insurers from contesting statements made by insureds in applications for insurance after the passage of a stipulated number of years​ (typically one​ year).

Which of the following is an INCORRECT statement regarding an insurable​ interest?

An insurable interest in another​ person's life must exist at the time of that​ person's death.

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

C corporation

Which of the following is an INCORRECT statement regarding common​ stock?

Common stock has a fixed maturity date.

​_____ is a form of ownership in which each spouse owns an equal​ one-half share of the income of both spouses and the assets acquired during the marriage.

Community property

​_____ insurance is a form of insurance that insures an automobile from loss or damage due to causes other than collision.

Comprehensive

Which of the following statements about automobile liability insurance is NOT​ true?

Comprehensive automobile insurance is a form of insurance that insures an automobile from loss or damage due to collision. This is the correct answer. Some omnibus clauses extend coverage to third parties who drive automobiles with permission from a person to whom the owner gave permission to drive the car. The owner can expand their coverage by adding an​ drive-other coverage​ (D.O.C.), which protects the insured while he or she is driving other automobiles ​(e.g​., rental​ cars). A basic automobile liability policy protects the insured when driving his or her own automobile. The owner can expand their coverage by adding an omnibus​ clause, which protects the owner when someone else drives the car with permission.

​_____ are the most financially dominant form of business organization in the United​ States, generating more than 85 percent of the​ country's gross business receipts.

Corporations

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

Delaware

​_____ insurance provides a monthly income to an insured who is disabled and cannot work.

Disability

Which of the following is an INCORRECT statement regarding community​ property?

During the​ marriage, either spouse can​ sell, transfer, or make a gift of community property without the consent of the other spouse.

​__________ 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

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 is an INCORRECT statement regarding generally accepted accounting principles​ (GAAPs)?

GAAPs specify the methods and procedures that are to be used by public accountants when conducting external audits of company financial statements.

Which of the following is an INCORRECT statement regarding generally accepted auditing standards​ (GAASs)?

GAASs are standards for the preparation and presentation of financial statements.

Which of the following is an INCORRECT statement regarding​ promoters' liability and the​ corporation's liability on​ promoters' contracts?

If the corporation never comes into​ existence, the promoters have no liability on the contract.

Which of the following statements is false regarding implied warranties for negotiable​ instruments?

Implied warranties are made when a negotiable instrument is originally issued.

Which of the following is NOT true about a limited liability partnership​ (LLP)?

In an​ LLP, all of the partners are personally liable for the debts and obligations of the LLP.

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

Internal Revenue Service

Which of the following is a reason why the United Nations Convention for the International Sale of Goods​ (CISG) is increasingly being used for international sales​ transactions?

It is written in plain business language that is more easily understood by contracting parties than the laws of many nations.

What of the following is NOT a feature of the​ Sarbanes-Oxley Act?

It prohibits employees of an accounting firm from ever becoming chief executive officer at one of their audit clients.

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.

Roberto purchases​ $1 million of life insurance and names his​ spouse, Jillian, the beneficiary. The policy contains the usual period for which a suicide clause is valid. Twenty months after purchasing the​ insurance, Roberto commits suicide. Which of the following is​ true?

Jillian may not recover the insurance proceeds because​ Roberto's suicide occurred within two years of the issuance of the life insurance policy.

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

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.

​_____ is a rule stating that an accountant is liable only for negligence to third parties who are in privity of contract or in a​ privity-like relationship with the accountant.

The Ultramares doctrine

Which of the following is an INCORRECT statement regarding an insurable​ interest?

Mortgagees do not have an insurable interest in property. Anyone who would suffer a monetary loss from the destruction of real or personal property has an insurable interest in that property. If the insured does not have an insurable interest in the property being​ insured, the contract is treated as a wager and cannot be enforced. Ownership creates an insurable interest. Anyone who would suffer a pecuniary loss from the destruction of real or personal property has an insurable interest in that property.

Which of the following is an INCORRECT statement regarding the parties to a life insurance​ contract?

Most life insurance contracts do not permit the owner of the policy to change beneficiaries.

Which of the following is an INCORRECT statement regarding the​ Sarbanes-Oxley Act?

The act makes it possible for a registered public accounting firm to provide simultaneously audit and bookkeeping services to a public company.

Which of the following is NOT true about Section 10A of the Securities Exchange Act of​ 1934?

Once the auditor reports the illegal act to the board of​ directors, the board of directors must inform the Securities and Exchange Commission of the​ auditor's conclusion within seven business days.

​Bingo, LLP enters into a contract to lease office space from a landlord for a​ five-year period. Two years​ later, the LLP fails and is unable to pay for the remaining three​ years' rent. The landlord sues both the LLP and the partners for breach of contract. Which of the following is​ true?

Only the assets of​ Bingo, LLC can be reached.

Which of the following is NOT true about an audit​ committee?

The audit committee must register with the Public Company Accounting Oversight Board.

Which of the following is NOT a criterion a corporation must meet in order to be taxed as an S​ corporation?

The corporation must have no more than​ 1,000 shareholders.

​_____ is a rule stating that an accountant is liable for negligence to third parties who are foreseeable users of the​ client's financial statements. It provides the broadest standard for holding accountants liable to third parties for negligence.

The foreseeability standard

​_____ generally:​ 1) establish(es) land use districts within the​ municipality; 2)​ restrict(s) the​ height, size, and location of buildings on a building​ site; and​ 3) establish(es) aesthetic requirements or limitations for the exterior of buildings.

Zoning

Who is a good faith purchaser for​ value?

a person who pays sufficient consideration or rent for the goods to the person he or she honestly believes has good title to or leasehold interest in those goods

Who is a buyer in the ordinary course of​ business?

a person​ who, in good faith and without knowledge that the sale violates the ownership or security interests of a third​ party, buys goods in the ordinary course of business

What is an insurance contract​ called?

a policy

The money paid to the insurance company is called​ _____.

a premium

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

A party who signs an instrument for the purpose of lending his or her name​ (and credit) to another party to the instrument is known as​ a(n)

accommodation party

Which type of opinion is usually issued when an auditor determines that a company has materially misstated certain items on its financial​ statements?

adverse

​A(n) _____ opinion determines that the financial statements do not fairly represent the​ company's financial​ position, results of​ operations, or change in cash flows in conformity with generally accepted accounting principles.

adverse

In order to amend the articles of organization for New​ Navy, LLC,​ ________.They are only liable to the extent of their capital contributions to the corporation.

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

An indorsement may also be written on a separate piece of paper called​ a(n) _______.

allonge

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

commercial transactions involving the sale of services

The parties to a tenancy in common are called tenants in​ _____.

common

Cumulative preferred stock provides that any missed dividend payment must be paid in the future to the preferred shareholders before the​ _________ can receive any dividends. The amount of unpaid cumulative dividends is called​ __________.

common​ shareholders; dividend arrearages

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

comprehensive

Two or more persons may own a piece of real property. This is called​ _____ ownership.

concurrent

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

concurrent ownership

When a buyer purchases substitute goods when a seller fails to make​ delivery, it is known as which of the​ following?

cover

When a lessee purchases or leases substitute goods when a lessor fails to make​ delivery, it is known as​ _______.

cover

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

creditors

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

What are the two primary duties of an​ insurer?

defend and pay

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

dental care

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

determine whether the name is federally trademarked

Actions or events that relieve certain parties from liability on negotiable instruments are known as​ _____________.

discharge

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

discharge

​A(n) _____ of opinion expresses the​ auditor's inability to draw a conclusion about the accuracy of the​ company's financial records.

disclaimer

The buyer has all of the following options if the goods or delivery fail to conform to the contract​ EXCEPT?

dispose of the goods

A​ _____ interest is a​ member's ownership interest in an LLC that entitles the member to receive distributions of money and property from the LLC.

distributional

The Ford Motor​ Company, a major manufacturer of automobiles and other​ vehicles, is incorporated in Delaware. It is​ a(n) _____ corporation in Delaware.

domestic

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

duty of care

The terms of​ a(n) _____ are specified when an accountant and a client enter into a contract for the provisions of accounting services by the accountant.

engagement

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

estate in land

A life estate may be measured by the life of a third​ party, which is called​ a(n) _____.

estate pur autre vie

Mario and Mary live next door to each other with a lot owned by Mario in between the two houses. Mario conveys this vacant lot to Mary for the duration of the life of​ Mary's husband Paolo. Mary owns​ a(n) _____ in a piece of real property. This means that Mary is treated as the owner of the​ property_____.

estate pur autre​ vie; during the duration of the life estate

The Uniform Commercial​ Code's _________ rule states that a merchant who makes an offer to​ buy, sell, or lease​ goods, and assures the other party in a separate writing that the offer will be held​ open, cannot revoke the offer for the time stated.

firm offer

A dividend preference is the right to receive​ a(n) _____ dividend at set periods during the year.

fixed

Goods that are affixed to real estate and thus become part of it are known as​ _____.

fixtures

The Ford Motor​ Company, a major manufacturer of automobiles and other​ vehicles, is incorporated in Delaware. It distributes vehicles in​ Delaware, as well as the other 49 states. The Ford Motor Company is​ a(n) _____ corporation in the other 49 states.

foreign

Solis​ & Co., a national accounting​ firm, was hired to conduct an audit of Huntington​ Corp.'s financial statements. Solis​ & Co. negligently conducted the audit and failed to discover​$1 million in false receivables that were based on fictitious sales and other suspicious activities. Solis​ & Co. rendered an unqualified opinion and provided 32 copies of the audited financial statements to Huntington Corp. Huntington gave one copy to Stemler State​ Bank, who then made a loan to Hu

foreseeability standard

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

If a person owns real property in fee​ simple, their ownership​ _____.

has no limitation on inheritability

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

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

Business​ _____ insurance reimburses a business for loss of revenue incurred when the business has been damaged or destroyed by fire or some other peril.

interruption

​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

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

lessor

Automobile​ _____ insurance covers damages that the insured causes to third​ parties, including both bodily injury and property damage.

liability

​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

Members of an LLC have​ _____ liability for the​ debts, obligations, and liabilities of an LLC.

limited

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

limited liability company

Most public accounting firms are organized and operated as​ _____.

limited liability partnerships

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

manager-

The owners of LLCs are usually called​ _____.

members

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

If Kiki buys a lot from Joey that is landlocked​ (meaning the purchased lot has no direct access to a road​ ), if Kiki can drive over​ Joey's lot to reach the nearest​ road, this is known as an easement by​ ________.

necessity

In an international letter of credit​ transaction, the​ seller's bank is called the​ ________ bank.

nominated

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

Managers of LLCs are​ _____ liable for the​ debts, obligations, and liabilities of the LLC they manage.

not personally

The fiduciary duty of loyalty includes the following duties​ EXCEPT?

not to engage in a known violation of the law

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

only the limited partners up to their capital contribution

​A(n) _____ is an agreement entered into among members that governs the affairs and business of the limited liability company​ (LLC) and the relations among​ members, managers, and the LLC.

operating agreement

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

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

An insurance contract is called​ a(n) _____.

policy

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

promoter

​A(n) _____ is a person who organizes and starts a​ corporation, negotiates and enters into contracts in advance of its​ formation, and finds the initial investors to finance the corporation.

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

Which of the following is NOT a typical clause in an insurance​ policy?

ratification

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

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

Jim​ Bob, Carlos,​ Carole, and Serena formed the Huntington​ Corporation, which opened a restaurant in December of 2019. Jim​ Bob, Carlos​ Carole, and Serena are all on the board of directors. Which of the following would NOT be an action taken at the first organizational meeting of the​ board?

selecting a state for incorporation

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

seller

A destination contract requires the seller to deliver goods to either the​ buyer's place of business or another​ destination, with title passing when​ _______________.

seller tenders delivery of the goods at the specified destination

​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​ ________.servient

shareholders

Owners of corporations are called​ _____.

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

Which of the following is NOT a form of​ co-ownership of real​ property?

sole proprietorship

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

state corporation codes

What remedies does a lessor have if the goods are in the possession of a common carrier and the lessee or lessee breaches the​ contract?

stopping goods in transit

What remedy does a seller have if the goods are in the possession of a common carrier and the buyer or lessee breaches the​ contract?

stopping goods in transit

Joint tenancy is a form of​ co-ownership that includes the right of​ _____.

survivorship

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)

Which of the following is a major rule of liability that a state can adopt in determining whether an accountant is liable in negligence to third​ parties?

the Ultramares doctrine This is the correct answer. the absolute liability standard the comparative negligence doctrine the strict liability standard the contributory negligence doctrine

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

A holder who does not qualify as a holder in due course in his or her own right becomes a holder in due course if he or she acquires the instrument through a holder in due course. This is called​ _______________.

the shelter principle

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

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

title

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

to accept and pay for the goods

Why was the FTC HDC rule​ enacted?

to correct the harsh result of the holder in due course rule in connection with consumer purchasers of goods

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

to deliver conforming goods

​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

Which of the following is NOT one of the most common forms of life​ insurance?

triple indemnity

Parties to a life insurance contract include all EXCEPT which of the​ following?

trustee

The usual time period for which a suicide clause is valid is​ _____.

two years

A conditional sale is​ a(n) ___________.

type of sale where the seller entrusts possession of goods to a buyer on a trial basis

An act by a corporation that is beyond its express or implied powers is called​ a(n) _____ act.

ultra vires

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

Insureds who want to increase their liability coverage beyond the original coverage can purchase​ _____ insurance.

umbrella

An insurance company is also called the​ _____.

underwriter

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

​A(n) _____ opinion is the most favorable opinion an auditor can give.

unqualified

​A(n) _____ opinion represents an​ auditor's finding that the​ company's financial statements fairly represent the​ company's financial​ position, the results of its​ operations, and the change in cash flows for the period under​ audit, in conformity with generally accepted accounting principles.

unqualified

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

Jim​ Bob, Carlos,​ Carole, and Serena formed the Huntington​ Corporation, which opened a restaurant in December of 2019. Due to the pandemic and the​ state's order to​ close, in June of 2020 the Huntington Corporation filed articles of dissolution with the Secretary of State. This is known as​ a(n) _____, which required​ _____ vote by the shareholders

voluntary​ dissolution; a majority

When does an umbrella policy make a pay​ out?

when primary policy limits on other insurance policies have been exceeded

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

​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

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

The bankruptcy court will confirm a plan of reorganization under the acceptance method if​ ________.

​(1) the plan is in the best interests of the creditors because the creditors would receive at least what they would receive in a Chapter 7 liquidation​ bankruptcy, (2) the plan is​ feasible, and​ (3) each class of creditors accepts the plan

Section​ _____ of the​ _____ prohibits any manipulative or deceptive practice in connection with the purchase or sale of any security.

​10(b); Securities Exchange Act of 1934

Section​ _____ of the​ _____ imposes civil liability on any person who makes false or misleading statements of material fact in any​ application, report, or document filed with the SEC.

​18(a); Securities Exchange Act of 1934

In​ 2013, Target​ Corporation, the​ third-largest retailer in the United​ States, was subject to a cyberattack when hackers breached​ Target's firewalls and obtained information on more than​ _________ million credit and debit cards used by Target customers. Target had cyber insurance that covered about​ _________ of the​ company's liability caused by the security breach.

​40; two-thirds

Jim​ Bob, Carlos,​ Carole, and Serena formed the Huntington​ Corporation, which opened a restaurant in December of 2019. Although the corporate bylaws expressly prohibit the use of the leased space for anything other than a​ restaurant, the pandemic in early 2020 forced the closing of the restaurant and Jim Bob leased the space to a pet store. Which of the following is​ true?

​Carlos, Carole,​ and/or Serena could bring a lawsuit against Jim Bob for engaging in an ultra vires act.

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

​Directors' and​ officers'

Certified public accountants must comply with two uniform standards of professional​ conduct: _____ and​ _____.

​GAAPs; GAASs

Which of the following is an INCORRECT statement regarding corporate​ shareholders?

​Generally, shareholders have unlimited liability for corporate debts.

Which of the following is an INCORRECT statement regarding corporate​ bylaws?

​Incorporators, not the initial​ directors, may adopt the bylaws of the corporation.

Four​ accountants, Jim​ Bob, Carlos,​ Carole, and Serena form a limited liability partnership​ (LLP), JCCS,​ LLP, to provide auditing services.​ JCCS, LLP is organized in the State of Texas. After several years of​ business, the firm opens an office in Oklahoma. Which of the following is​ true?

​JCCS, LLP is a domestic LLP in Texas and must register as a foreign LLP in Oklahoma.

Maureen is a fire fighter in​ Pullman, Washington. While carrying a child out of a burning​ building, Maureen injures her back and can no longer work. What type of insurance will provide her with a monthly​ income? Who usually pays the​ premium?

​disability; both employer and employee

​Jessica's daughter,​ Anya, has a sleepover at her house with five girls from school. During the night a fire breaks out and​ Anya's friend Amy is injured. Which type of insurance policy or clause will cover​ Amy's injuries?

​homeowner's policy

A bond is a​ _________ security that is​ __________.

​long-term, debt; secured by some form of collateral

A debenture is a​ _________ debt instrument that is​ __________.

​long-term, unsecured; based on a​ corporation's general credit standing

An LLC can be either​ a(n) _____-managed LLC or​ a(n) _____-managed LLC.

​member; manager

Under a system of​ _____ automobile​ insurance, a​ driver's insurance company pays for any injuries or death he or she suffered in an​ accident, no matter who caused the accident.

​no-fault

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?

​seller's place of business

A note is a​ _________ security with a maturity of 5 years or less. Notes can be​ __________.

​short-term, debt; either secured or unsecured

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.

An LLC is​ a(n) _____ LLC unless it is designated as​ a(n) _____ LLC.

​at-will; term

Section​ _____ of the​ _____ imposes civil liability on accountants and others for​ 1) making misstatements or omissions of material facts in a registration statement or​ 2) failing to find such misstatements or omissions.

11(a); Securities Act of 1933

Which of the following is NOT true about holding​ companies?

Many holding companies are S corporations.

Jordan writes a​ $1,000 check to Marilyn. Marilyn raises the amount on the check to​ $10,000 by skilled handwriting. Marilyn negotiates the check to Brian. Brian presents the check to a car dealership for payment on a car. The car dealership then submits the check to the bank for payment. Which party has made the implied presentment​ warranty?

Marilyn

Which of the following is an INCORRECT statement regarding marine​ insurance?

Marine insurers do not distinguish between inland marine insurance and ocean marine​ insurance, since both involve​ water-related perils.

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.

Two

The​ _____ is a model act that provides comprehensive and uniform laws for the​ formation, operation, and dissolution of LLCs.

ULLCA

Solis​ & Co., a national accounting​ firm, was hired to conduct an audit of Huntington​ Corp.'s financial statements in order for them to secure a bank loan with Stemler State Bank. Solis​ & Co. negligently conducted the audit and failed to discover​ $1 million in false receivables that were based on fictitious sales and other suspicious activities. Solis​ & Co. rendered an unqualified opinion and provided 32 copies of the audited financial statements to Huntington Corp. Huntington g

Ultramares doctrine

The articles of incorporation are also referred to as the corporate​ _____.

charter

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

​A(n) _____ clause requires an insured to pay part of the cost of an insured loss.

coinsurance

An owner of an automobile may purchase​ _____ insurance that insures his or her car against risk of loss or damage. This form of property insurance pays for damage caused if the car is struck by another car.

collision

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

collision

Which of the following is NOT covered by comprehensive​ insurance?

collision

Which of the following is NOT a way ownership of real property can be transferred from one person to​ another?

revocation

Which of the following is NOT a possible preference held by preferred​ stockholders?

right to authorize new shares

​________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

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.

Which of the following statements about a personal articles floater is NOT​ true?

A personal articles floater does not provide coverage for loss or damage to the articles while traveling.

Which of the following is NOT true regarding the management of an​ LLC?

All actions in a​ manager-managed LLC must be delegated to the managers.

Which of the following is NOT true about the Uniform Limited Liability Company Act​ (ULLCA)?

All states have adopted the ULLCA as law.

Which of the following is an INCORRECT statement regarding the management of an​ LLC?

An LLC must be managed by designated​ management, not by its members.

Which of the following is NOT true about the limited liability of a limited liability partnership​ (LLP)?

An LLP must have at least one general partner who is personally liable for the debts and obligations of the LLP.

​________ 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

Which of the following is true about how a​ sales/lease contract may be​ accepted?

An offer may be accepted when sent in any reasonable manner if no specific manner is indicated.

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

​_____ can be defined as a verification of a​ company's books and records.

Audit

Which of the following is an INCORRECT statement regarding capital contributions to a limited liability company​ (LLC)?

A​ member's capital contribution to an LLC may not be in the form of services.

Which of the following is an INCORRECT statement regarding a distributional interest in an​ LLC?

A​ member's distributional interest in an LLC must be transferred in whole.

Which of the following is an INCORRECT statement regarding capital contributions to an​ LLC?

A​ member's obligation to contribute capital is excused by the​ member's death.

Four​ accountants, Jim​ Bob, Carlos,​ Carole, and Serena form a limited liability partnership​ (LLP) to provide auditing services. While performing an audit on a small​ business, Jim Bob is​ negligent, resulting in a​ $1 million judgment against the business. Which of the following is​ true?

Both Jim Bob and the LLP are​ liable, but not​ Carlos, Carole, or Serena.

Jim​ Bob, Carlos,​ Carole, and Serena formed the Huntington​ Corporation, which opened a restaurant in December of 2019. Each of the shareholders contributed​ $200,000 in capital. Huntington Corporation borrowed​ $1 million from its local bank. Due to the pandemic and the​ state's order to​ close, in June of 2020 the Huntington Corporation filed for bankruptcy.​ Huntington's only assets were​ $100,000, which the bank​ recovered, leaving a remaining debt of​ $900,000 Which o

Jim​ Bob, Carlos,​ Carole, and Serena are not liable for the​ $900,000 owed to the bank.

​A(n) _____ is an unincorporated business entity that combines the most favorable attributes of general​ partnerships, limited​ partnerships, and corporations.

LLC

Which of the following is an INCORRECT statement regarding limited liability companies​ (LLCs)?

LLCs are creatures of federal statue.

​_____ stock is a type of equity security that is given certain preferences and rights over common stock.

Preferred

Which of the following is an INCORRECT statement regarding preferred​ stock?

Preferred stockholders have unlimited liability for corporate debts and other obligations.

Which of the following is NOT true about title​ insurance?

Prior title insurance policies can be transferred over to new buyers.

​_____ property is immovable or attached to immovable land or buildings.

Real

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

Real property

​_________ of the UCC​ contain(s) provisions that recognize the importance of electronic contracting in sales and lease transactions.

Revised Article 2​ (Sales) and Revised Article 2A​ (Leases)

Solis​ & Co., a national accounting​ firm, was hired to conduct an audit of Huntington​ Corp.'s financial statements in order for them to secure a bank loan. Solis​ & Co. negligently conducted the audit and failed to discover​ $1 million in false receivables that were based on fictitious sales and other suspicious activities. Solis​ & Co. rendered an unqualified opinion and provided 32 copies of the audited financial statements to Huntington Corp. Huntington gave one copy to Stemler

Section 552 of the Restatement​ (Second) of Torts

The majority of states have adopted which rule of liability in determining whether an accountant is liable in negligence to third​ parties?

Section 552 of the Restatement​ (Second) of Torts

​_____ is a rule stating that an accountant is liable only for negligence to third parties who are members of a limited class of intended users of the​ client's financial statements.

Section 552 of the Restatement​ (Second) of Torts

Which of the following is a major rule of liability that a state can adopt in determining whether an accountant is liable in negligence to third​ parties?

Section 552 of the Restatement​ (Second) of Torts Correct answer the comparative negligence doctrine the contributory negligence doctrine the absolute liability standard the strict liability standard

An owner of a​ house, Shelly, invites a​ friend, Sandy, over for dinner. Shelly leaves a garden hose across the walkway to the house. The walkway is not well​ lit, and the danger is not obvious. Sandy trips on the garden house and is injured. Which of the following is​ true?

Shelly is liable for negligence because Sandy would be considered a licensee.

An owner of a​ house, Shelly, invites a​ friend, Sandy, over for dinner. Shelly leaves a bright orange garden hose across the walkway to the house. The walkway is very well​ lit, and the bright orange hose can be easily seen while walking up the walkway. Sandy trips on the garden house and is injured. Which of the following is​ true?

Shelly is not liable for negligence because Sandy should have noticed the open and obvious danger.

An owner of a​ house, Shelly, invites a​ friend, Sandy, over for dinner. Shelly leaves a garden hose across the walkway to the house. The walkway is not well​ lit, and the danger is not obvious. While having​ dinner, Shelly and Sandy hear a loud noise outside. One of​ Shelly's neighbors,​ Vinny, was cutting through her yard even though she had previously told him not to use her property as a shortcut. Vinny was injured when he tripped on the garden house. Which of the following is​

Shelly is not liable for negligence because Vinny would be considered a trespasser.

Which of the following is true about​ accountant-client privilege?

Sometimes clients of accountants are sued in court.

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

Subchapter S Revision Act

Which of the following is an INCORRECT statement regarding subsurface​ rights?

Subsurface rights are also referred to as intangible rights.

​_____ is a form of​ co-ownership of real property that can be used only by married couples.

Tenancy by the entirety

Which of the following is an INCORRECT statement regarding an insurable​ interest?

Tenants do not have an insurable interest in property.

​________________________ made it more difficult for debtors to relieve themselves of unwanted debt through bankruptcy proceedings.

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005

Which of the following statements about automobile liability insurance is NOT​ true?

The minimum legal required liability insurance is usually quite high ​(e.g.​, ​$500,000).

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 is NOT true about adverse​ possession?

The possessor must occupy the property with the express or implied permission of the owner.

Which of the following is an INCORRECT statement regarding the registered office or registered agent of a​ corporation?

The registered office must be the same as the​ corporation's place of business.

What is the limited liability of​ shareholders?

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

Which of the following statements about​ key-person life insurance is NOT​ true?

The​ key-person pays the premiums for the​ key-person life insurance policies.

Which is the following statements about title insurance is NOT​ true?

Title insurance protects against defects in titles and liens or encumbrances that are disclosed on the title insurance policy.

Which of the follows correctly ranks the major rules of liability ​(Ultramares​, Section​ 552, foreseeability​ standard) in order from least broad to broadest standard for holding accountants liable to third parties for​ negligence?

Ultramares​, Section​ 552, foreseeability standard

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

Umbrella

Which of the following is NOT true about a​ member's dissociation from a limited liability company​ (LLC)?

Under no circumstances can a member withdraw from a term LLC.

Which of the following is an INCORRECT statement regarding the taxation of limited liability companies​ (LLCs)?

Under the Internal Revenue​ Code, for federal income tax​ purposes, an LLC is taxed as a corporation unless it elects to be taxed as a partnership.

Who bears the risk of loss when the goods are stolen and​ resold?

buyer

As a general​ rule, members of an LLC are not personally liable to third persons for the​ debts, obligations, and liabilities of an LLC beyond their​ _____.

capital contribution

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

certificates of stock

Jim​ Bob, Carlos,​ Carole, and Serena formed the Huntington​ Corporation, which opened a restaurant in December of 2019. Due to the pandemic and the​ state's order to​ close, in June of​ 2020, the Huntington Corporation filed articles of dissolution with the Secretary of State. Which of the following would be paid​ first?

expenses of liquidation

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

Mary owns a​ _____ in a piece of real property. This means that there are no limitations on her ownership rights. Mary owns this property while she is​ alive, with no conditions on her ownership​ rights, and she can transfer the property by will to a named beneficiary or beneficiaries when she dies.

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 professional who is not a certified public accountant is generally referred to as​ a(n) _____ accountant.

public

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

publicly held

If Anastasia indorsed her check by writing​ "without recourse" above her​ signature, what type of indorsement would be​ created?

qualified

​A(n) _____ opinion states that the financial statements are fairly represented except​ for, or subject​ to, a departure from generally accepted accounting​ principles, a change in accounting​ principles, or a material uncertainty.

qualified

Mario and Mary live next door to each other with a lot owned by Mario in between the two houses. Mario conveys this vacant lot to Mary provided she never builds on it. Mary owns a​ _____ in the vacant lot. This means that Mary​ _____.

qualified​ fee; has all the rights of a fee simple absolute owner except that her ownership rights would be terminated if she tries to build on it

​A(n) _____ deed is a deed in which the grantor transfers only whatever interest they have in the real property.

quitclaim

If the right of possession returns to a third party on the expiration of a limited or contingent​ estate, it is called a​ _____.

remainder

Common stock is a type of equity security that represents the​ _____ value of a corporation.

residual

Common stock represents the​ ________.

residual value of a corporation

A​ _____ is a right of possession that returns to the grantor after the expiration of a limited or contingent estate.

reversion

Which of the following is a major rule of liability that a state can adopt in determining whether an accountant is liable in negligence to third​ parties?

the foreseeability standard This is the correct answer. the comparative negligence doctrine the contributory negligence doctrine the absolute liability standard the strict liability standard

A major advantage of a corporation is​ ________.

the free transferability of shares

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

According to the Revised Model Business Corporation Act​ (RMBCA), the articles of incorporation must include all EXCEPT which of the​ following?

the period of duration of the corporation

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

​_____________ 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

Which of the following is NOT true about a​ condominium?

​Usually, condominium owners may not sell or sublease their units without the approval of the other owners.

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

​Workers' compensation

​Zora, Heathcliff,​ Manuel, and Mohammad own a large commercial building as joint tenants. If Heathcliff executes a will that leaves all of his property to his alma mater​ university, who owns the property when Heathcliff​ dies?

​Zora, Manuel, and Mohammad each own a​ one-third interest in the building.

An insurance​ _____ usually works exclusively for one insurance​ company, while an insurance​ _____ is an independent contractor who represents a number of insurance companies.

​agent; broker

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

​at-will


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