93. Which of the following is a legitimate concern for clients or third parties who rely on

professionals who provide their services through a limited liability partnership?

a. the adequacy of the profession's indemnification fund to cover losses

b. whether individual partners remain liable for their own negligence

c. whether highly specialized professional protection associations defend claims

d. whether there will be compensation for losses caused by the professional

94. What are the practical implications of the fact that most professions in Canada are self-regulated?

a. Cost effectiveness is achieved by this arrangement.

b. Professionals are not subject to discipline.

c. Legislation gives autonomy and sometimes a monopoly over specific professional activities.

d. Professionals do not need to be licensed.

95. Which of the following is a distinguishing characteristic of professions?

a. Their self regulation has been curtailed by public body oversight.

b. Provincial statues provide for more than one governing body.

c. Provincial statues establish the rights of professions to govern themselves.

d. The right to perform an audit is defined by provincial legislation.

96. Which statement best represents one of the features of lawyer client privilege?

a. It cannot be waived.

b. It arises out of contract.

c. It belongs to the client and can only be waived by the client.

d. It belongs to the lawyer and can only be waived by the lawyer.

97. Dravena is an accountant and she also regularly dabbles in commercial real estate investments.

Recently she advised one of her accounting clients to invest in an apartment building that her and

another accountant are building. Has Dravena breached any of her obligations to her client?

a. She has breached her client's right to privilege.

b. She has breached her duty of confidentiality.

c. She has breached her duty to provide a reasonably competent service.

d. She has placed herself in a conflict of interest.

5. Which statement best describes the actual authority of an agent?

a. It must be created in writing.

b. It may be express or implied.

c. It cannot be easily customized.

d. It is always limited in time and scope.

7. From which of the following does a third party typically derive an agent's ostensible authority?

a. the conduct of the principal

b. reasonable inference of usual authority

c. an expression of the limitations of authority

d. inferring typical authority

10. Which statement best describes fiduciary relationships?

a. All fiduciaries are agents.

b. All agents are fiduciaries.

c. All fiduciaries are employees.

d. All employees are fiduciaries.

13. What would a court require evidence of in order to establish the existence of a fiduciary duty

owed to a plaintiff?

a. the principal's influence and trust

b. the defendant's reliance, power, and influence

c. the agent's influence and reliance

d. the plaintiff's reliance, trust, and vulnerability

15. Karim's agent, Monica, was instructed to negotiate a contract to buy a new delivery truck for

Karim's courier business but not to disclose Karim's identity, other than to indicate she is acting

for 'an undisclosed buyer'. Which statement best describes this situation?

a. Karim and Monica will both be bound by the contract.

b. Only Monica will be bound by the contract.

c. Only Karim will be bound by the contract.

d. Neither Karim or Monica will be bound by the contract.

16. Blanchett Lighting Supplies has terminated the employment of Drako, its long-time purchasing

agent. What an advisable step for Blanchett to take after terminating this agency relationship?

a. Ensure the termination agreement is put into writing.

b. Ensure that third parties are notified.

c. Ensure an indemnity agreement is in place.

d. Ensure the agent is informed in writing of the termination.

17. Which form of business organization provides the most control but also the greatest liability risk

for the owner?

a. partnership b. sole proprietorship

c. joint venture d. corporation

18. Which form of a business can issues shares to raise capital for operations?

a. an unlimited proprietorship b. a sole proprietorship

c. a limited liability partnership d. a corporation

20. In what manner are a sole proprietorship and a partnership similar?

a. There is no legislated regulation affecting either.

b. Both require special steps to create.

c. Neither is a legal entity with capacity to contract.

d. Both require regulation of their profit motives.

21. Lita and Linda are partners in a general partnership and have borrowed $10,000 from the bank to

finance their start-up. How is their liability for the bank loan best characterized?

a. limited liability

b. joint liability

c. proportional limited liability

d. full and complete impunity

22. Which statement best describes how a partnership comes into existence?

a. The partners must sign a written partnership agreement.

b. The partners must register the partnership.

c. Two or more people carry on business together with a view to profit.

d. Two or more people purchase property together.

23. Ray and Mohammed are forming a general partnership but have not yet discussed how profits

will be shared between them. Which statement best describes their legal situation?

a. General partners are always required to share profits equally.

b. They are automatically entitled to a share proportional their relative contributions to the

capital of the partnership.

c. They cannot have a partnership until they determined how profits will be shared.

d. If they fail to agree, partnership legislation requires them to share profits equally.

26. Which of the following is an example of the implied rules contained in the Partnership Act ?

a. Each partner may sue the other for breach of fiduciary duty.

b. Each partner is a fiduciary to the other partners.

c. Each partner is entitled to have their name in the partnership business.

d. Each partner may take part in the management of the business.

27. Which of the following is a distinguishing feature of a limited partnership?

a. The liability of each partner is limited to their capital contributions.

b. The liability of some partners is limited to their capital contributions.

c. Limited partners may participate in the day-to-day management of the firm.

d. Limited partnerships are only available to professionals.

28. What type of liability would flow to the other partners in circumstances involving a wrongful act

or omission by one partner acting within the course of employment?

a. joint liability

b. unlimited liability

c. joint and several liability

d. several liability

29. The Partnership Act provides for the following rule: "all partners are to share equally in the

capital and profits of the business and must contribute equally to the losses." Which statement

best exemplifies this rule?

a. The losses are restricted to the capital investments made by each partner.

b. This rule is optional and may be varied by written agreement.

c. This rule is mandatory and cannot be modified by agreement.

d. The rule applies only to limited liability partnerships.