1. The method of voting for directors in which each shareholder casts as many votes as shares held is the ______ method.

a.Straight

b.Cumulative

c.Derivative

d.Absolute

2.Rodrigo was the minority shareholder in a closely held corporation. Despite massive profits, no dividends were ever declared. The corporation did, however, pay extremely large salaries and bonuses to the officers of the corporation, who were also the majority shareholders. The majority shareholders of this corporation are guilty of ______.

Select one:

a.Ultra vires acts

b.Quo warranto acts

c.Oppressive conduct

d.Embezzlement

3. To get the best possible legal representation, clients must be completely honest with their lawyers. To encourage this, legal communications between lawyers and clients cannot be used in legal proceedings. This principle is known as the ______.

Select one:

a.de facto rule

b.rule of 10-b5

c.attorney-client privilege

d.Marbury-Madison doctrine

4.Which of the following sections of the Uniform Commercial Code governs the sale of investment securities?

Select one:

a.Article 2

b.Article 2A

c.Article 8

d.Article 9

5.Corporate bond holders:

Select one:

a.Have an equity interest in the corporation.

b.Are entitled to receive dividends when dividends are declared.

c.Participate in the distribution of corporate assets when the corporation dissolves.

d.Are entitled to be paid a specified rate of interest for a set period of time.

6. Which of the following is considered a disadvantage of doing business as a general partnership?

Select one:

a.A general partnership is not a taxable entity under IRS rules.

b.Income in a general partnership flows directly to the partners.

c.All partners may be held liable for partnership debts.

d.All partners can participate in management of the partnership.

7.Corporations are recognized by the government as a legal:

Select one:

a.entity

b.minor

c.person

d.exemption

8. Which of the following best describes the "double taxation" on corporate profits?

Select one:

a.The profits of a corporation are taxed at twice the rate of the highest individual tax rate.

b.The income an individual gets from dividends is taxed at twice the rate of the income from wages.

c.The IRS is twice as likely to audit returns with dividend income as it is to audit returns with income from wages only.

d.Corporations pay taxes on their profits, then the shareholders pay taxes on the same profits when they are distributed as dividends.

9.An advantage of a partnership is:

Select one:

a.working hours

b.double-taxation

c.shared management and skills

d.conflict between partners

10. Mary is an accountant in Prestige Accounting Firm. Her employment contract contains a provision that prohibits her from doing accounting work for private clients or working for another accounting firm while she is employed by Prestige. This contract provision is a(n) ______.

Select one:

a.nondisclosure clause

b.no-moonlighting clause

c.confidentiality agreement

d.anti-assignment clause

11. The duty of ______ requires that an employee put the interests of the employer first.

Select one:

a.subrogation

b.best employment practice

c.loyalty

d.consideration