1. David L. operates his business as a sole proprietorship.Which is a correct statement about David's business model:

a.David maintains his business as an entity.

b.David's liability is limited to the capital he invested in the entity.

c.David must adhere to strict formalities to maintain 'separateness'.

d.None of the above.

5. Dang N. and her brother, Hung, decide to set up a business together.They do some research and engage an accountant with instructions to form an entity that will both shelter their personal assets from claims arising out of the operation of the business, and provide for 'pass-through' tax treatment of entity profits and losses that can be reported on their personal tax returns.What entities would the accountant consider?

a."C" corp.

b.Subchapter "S" corp.

c.Limited Liability Company ("LLC")

d.Both b. and c.

14. James S. has a consulting relationship with Horizon Systems and is classified by Horizon as an independent contractor.State tax authorities have notified Horizon that it will audit Horizon's independent contractor relationships and impose penalties and tax withholding liabilities if workers have been misclassified as an independent contractors.If workers such as James are determined to be misclassified, which penalty would the IRS likely impose on Horizon?

a.Payment of income taxes not withheld from worker salaries.

b.Payment of Social Security and Medicare taxes not withheld from worker salaries.

c.Payment of 'back' Unemployment Taxes.

d.All of the above.

16. Annie B., a well-known entrepreneur in her community, introduces Diego to her friends and customers as "a trusted associate." Without Annie's knowledge, Diego holds himself out as Annie's agent in a significant business transaction with Kosher Eatery, a new customer.When contacted by Kosher Eatery for delivery instructions, Annie denies Diego's authority to commit her to the contract.If Annie is held legally liable to Kosher Eatery under agency law principles, it will most likely be under

a.The Doctrine of Estoppel.

b.Apparent authority.

c.Express authority.

d.both a. and b.

21.Under the Doctrine of Respondeat Superior, an employer can be held liable for intentional torts committed by an employee within the course and scope of employment.Which factor might not be used by a court in determining whether a particular act occurred within the scope of employment

a.The extent to which the employer's interest was served by the act.

b.Whether the employer furnished the instrumentality by which the injury was inflicted.

c.The time and place of the act.

d.Whether the employee intended the act.

38.The Age Discrimination in Employment Act ("ADEA") prohibits employment discrimination on the basis of age.Which is not an essential element to be established by the employee/plaintiff for the ADEA to apply

a.The employee must be forty years of age or older.

b.The employee must be qualified for the position for which he or she was discharged.

c.The plaintiff employee must show that unlawful discrimination was the reason for the adverse employment action.

d.The employee was replaced by a worker outside the "protected class" (under the age of 40).