Business law for accountants

1.What source of law is considered primary:

a.Compilations of law

b.Legal encyclopedia

c.Common law doctrines

d.Legal treatises

2.What is the purpose of the uniform commercial code?

a.Establish the rules applying to real estate, service, and employment contracts

b.Reduce difficulties for businesses conducting trade and commerce

c.Facilitate commerce between the states and foreign countries

d.Discriminate against jurisdictions that have no adopted this uniform law

3.What type of speech is unprotected?

a.Corporate political

b.Symbolic

c.Commercial

d.Obscene

4.What is a characteristic of a legal claim?

a.The party has no right to demand a jury trial

b.The result is a decree

c.The remedy is partial performance

d.The remedy is usually monetary damages

5.A corporation is creating a media campaign. It has not been able to attract any famous personalities even when it was willing to pay. It believes it is crucial to have a famous person behind the campaign to succeed. The accountant is doing some errands and notices a crowd of people at the corner. He rushes over to see what is going on and notices a famous actor giving autographs and taking pictures with people. He asks the famous actor if he would take a picture and the famous actor agrees. The accountants gives the picture to advertising and tells the department that the famous actor agreed to have his picture taken. The corporation releases the media campaign with the famous actor's picture in it. While browsing on social media, the famous actor sees the campaign and calls his lawyer. The famous actor sues the corporation for using the the famous actor's picture without consent. Do this actor's allegations have merit?

a.Yes, because the corporation was willing to pay

b.Yes, because the accountant should have explained the purpose of the picture

c.No, because he agreed to have his picture taken by the accountant

d.No, because as a public figure he has fewer privileges to privacy

6.An internal auditor is drafting a code of conduct as instructed by the chief audit executive, the company is privately held and is a large manufacturer.

What is a requirement of a private company's code of conduct?

a.It indicates how employees should act

b.It had reviewed on a yearly basis

c.It is enforceable against vendors

d.It is required by state law

7.A CEO think it is time to talk about business ethics to senior management. She is developing a list of talking points. What is a fundamental ethical issue that must be included in these talking points.

a.Increasing stock price

b.Developing cost-saving strategies

c.Reducing operation expenses

d.Developing integrity and trust

8.A hardware store proactively informs clients whenever recalls happen. It is always willing to replace defective items at no cost even if the warranty has expired. Its philosophy is to maximize benefits and minimize harm. The approach is known as outcome-based ethics. What is a characteristic of outcome-based ethics?

a.It focuses on the consequences of an action

b.It focuses on the obligations of the corporation

c.It focuses on standards for behavior that traditionally were derived from religious authorities

d.It focuses on basic rights

9.A floral company is currently hiring a new employee, after interviewing a great candidate, the human resources coordinator looked up the candidate on social media. The human resources coordinator found too many pictures of cocktails and beers on the candidate's profile. The prospective candidate worked part-time as a bartender. The human resources coordinator called the candidate and told him she found a better fit even when she had not hired for the position. Are the human resources coordinator's actions legal and ethical?

a.The actions are illegal and unethical

b.The actions are illegal and ethical

c.The actions are legal but unethical

d.The actions are legal and ethical

10.Due to booming business, a manufacturing company hired two new employees for a rate of $15 per hour. Previous hires were paid a rate of $26 per hour. After analyzing the reduction on labor costs, the accountant recommended replacing the existing workers by less expensive workers. Is this accountant's recommendation legal?

a.No, because firing employees and hiring new ones for a lower wage is illegal

b.No, because the accountant's duties are just entering journal entries

c.Yes, because the firing employees and hiring new ones for a lower wage is no illegal

d.Yes, because the accountant's legal responsibility is to maximize value.

11.A local retailer decided to become a corporate citizen as a way to attract recent college graduates looking for socially responsible employers. It was presented with the opportunity if changing the plastic bags used to an environmentally friendly option. This change would cost $10K more than the plastic bags it used, so the retailer decided not to implement the change. A year later, a new legislation prohibiting the use of plastic bags was passed. Now that plastic bags cannot be used, the local retailer tells applicants that it decided to stop using plastic bags as part of its environment efforts. Are this local retailer's expressions ethical?

a.No, because it changed the practice based on a law.

b.Yes, because it thought about the change before it passed as law

c.Yes, because it was considered as a corporate citizen

d.No, because an environmental effort is not a socially responsible practice.

12.What kind of mark is "cheesy" in connection with a spa company?

a.Fanciful

b.Suggestive

c.Descriptive

d.Arbitrary

13.A company started a beverage company that sells a variety of juices. All the juices are sold in a plastic bottle with the company's name the name of the juice, and a logo the owner found online. Which type of protection should the owner seek for the name of the juice?

a.Patent

b.Copyright

c.Trade secret

d.Trademark

14.What intellectual property is protected with a copyright?

a.Lyrics to a song

b.Juice formula

c.Unlock function on a cellphone

d.Company name

15.Which type of trademark receives automatic protection?

a.Geographic marks

b.Fanciful marks

c.Personal name marks

d.Descriptive marks

16.Which type of trademarks never receive protection?

a.Generic marks

b.Personal name marks

c.Descriptive marks

d.Arbitrary marks

17.What should a business use to protect its trade secrets?

a.Trademark

b.Patent

c.Non-compete agreement

d.Non-disclosure

18.A company created a film to train its employees won workplace safety. What type of protection should the company seek for the training film?

a.Trademark

b.Patent

c.Trade secret

d.Copyright

19.On April 1, Peter sent a letter to his friend Monica, offering to buy 200 of her puff pastries for $100. After he sent the letter, Peter realized that his neighbor Joelle was selling her puff pastries for only $75. Peter sends a second letter to Monica by express mail, stating that he withdraws his former offer to buy her puff pastries. The second letter is delivered to Monica's home on April 3, and the first letter is delivered to Monica's business on April 6. Which act has Peter completed?

a.A revocation

b.A counteroffer

c.An acceptance

d.An option contract

20.When an offeree changes the quantity of items to be exchanged from the offeror's initial offer, what is the likely effect of the parties?

a.The offer is void

b.The offeree may unilaterally accept and ratify the contract

c.The offeree and offeror must go to court to resolve it

d.The offeree's response is a counteroffer

21.Under the Uniform Commercial Code, and without the parties agreeing to the contrary in the contract, when is a title passed from the seller to the buyer for the sale of goods?

a.During receipt of the goods by a buyer

b.During the delivery of the goods to a shipping company

c.During the physical acceptance of the goods by a buyer

d.During the receipt of the goods by a buyer and delivery of physical title to a shipping company.

22.The doctrine of substantial performance states that a party, who in good faith, performs substantially all the terms of a contract can enforce the contract against the other party. What is a basic requirement for performance to qualify as substantial?

a.There is a minor omission that can be remedied by monetary damages

b.The performance must not create substantially the same benefits as those promised in the contract

c.There is an intentional failure to comply with the contract terms

d.The performance may vary greatly from the performance promised in the contract

23.A client owed an accountant $2,500 for an accounting service provided. The client believed that the services the accountant provided cost less than $2,500 because they did not seem difficult, based on the client's judgement. When the accountant demanded payment, the client sent back a check for $2,250 marked "tendered in full satisfaction". The accountant endorsed and cashed the check. Which type of settlement agreement is this?

a.Novation

b.Bargained-for exchange

c.Accord and satisfaction

d.Mutual recission

24.A seller wishes to sell his old sedan for $10,000. The buyer, who was in desperate need of a car, saw the ad and called the seller to ask questions about the car. The buyer seemed very interested in the car and agreed to buy it. However, nothing was said about the time of delivery. Three days passed and the seller started to fear that the buyer will not buy the car. The seller called the buyer at 3 am and demanded that she pick up the car within 25 minutes and also threatened to sue her for breach of contract. What can this buyer claim against this seller's demand?

a.They needed to perfect the contract at the department of motor vehicles

b.She needed to see the car in person before making the purchase

c.It was an unreasonable hour and manner

d.The price is too high

25.Which situation is considered as a perfect tender rule?

a.Commercial impracticability

b.Conformance of goods

c.Substantial performance

d.Destruction of goods

26.A collector agreed to sell a rare collection of baseball cards to a buyer for $2,000 after several weeks of negotiation and discussion. After the sale, the buyer and collector do additional independent research, and both learn that the baseball cards are with only $20. What is the court's decision if this buyer sues the collector?

a.Recission

b.No damages

c.Punitive damages

d.Compensatory damages

27.A used car salesperson tells a buyer that the used car will last for at least five more years, if not many more. Which type of statement did this salesperson provide?

a.Statement of purpose

b.Statement of fact

c.Statement of opinion

d.Statement of value

28.Under which scenario may the acceptance of substantially impaired defective goods be revoked?

a.When the seller promises to cure and fails within a reasonable amount of time

b.When the buyer notifies the seller after reselling the goods

c.When the seller is insolvent

d.When the seller threatens to withhold future deliveries

29.What is the last resort when resolving creditor-debtor problems?

a.Judgement lien

b.Mechanic's lien

c.Bankruptcy

d.Garnishment

30.What is an example of a secured creditor?

a.Student loan provider

b.Car loan provider

c.Utility company

d.Medical biller

31.What is an example of an unsecured creditor?

a.A bank that issues a home equity line of credit

b.A bank that issues a car loan

c.A bank that issues a credit card

d.A bank that issues a mortgage

32.A creditor agrees to a loan debtor $250,000 to start a business. The guarantor agreed to be responsible for the debtor's obligation under the agreement. Without the guarantor knowing, the creditor and debtor increased the amount of the loan to $500,000. Is the guarantor liable to the creditor?

a.Yes, because the guarantor agreed to be responsible for the debtor's obligation

b.Yes, because if the creditor first attempted to collect from the debtor

c.No, not if the debtor files bankruptcy

d.No because they made a material change to the agreement without the guarantor's knowledge.

33.What is the time period for filing chapter 7 schedules after filing the petition?

a.Within 180 days after filing the petition in bankruptcy

b.Within 120 days after filing the petition in bankruptcy

c.Within 45 days after filing the petition in bankruptcy

d.Within 90 days after filing the petition in bankruptcy

34.What is the purpose of the means test?

a.To keep upper-income people from abusing the bankruptcy process by filing chapter 11

b.To keep corporations from abusing the bankruptcy process by filing chapter 7

c.To keep upper-income people from abusing the bankruptcy process by filing chapter 13

d.To keep upper-income people from abusing the bankruptcy process by filing chapter 7

35.Which bankruptcy filing requires a debtor to receive credit counseling?

a.Involuntary filing under chapter 11 reorganization

b.Voluntary filing under chapter 7 liquidation

c.Voluntary filing under chapter 13 adjustment of debts

d.Voluntary filing under chapter 11 reorganization