1.
Joshua runs a cattle breeding business and owes the
LeBron Ranch $1,000. Joshua agrees to
pay the LeBron a percentage of his profits each month until the debt is
paid. This agreement is
A. a delegation
B. a partnership
C. a delegation
D. a shareholder
2.
Susie and Reggie form Justin Bieber, Inc. Ultimate responsibility for policymaking
decisions necessary to the management of the corporation rests with Justin
Bieber’s
A. Incorporators
B. Officers
C. Shareholders
D. Board of
Directors
3.
Melissa is a junior partner in a law firm. As a partner, she has a right of inspection
that permits her to review
A. the clothing worn
by the staff
B. partnership books
and records
C. the tax returns
filed by other partners
D. any and all client
files
4.
Cortina Corporation handles investment accounts for
small to medium size employers. In most circumstances
the law would prohibitCortina from subjecting its employees to
A. drug tests
B. electronic
monitoring
C. lie-detector
tests
D. searches of their
desks, filing cabinets, or officers
5.
For the Age Discrimination to apply
A. the age
discrimination must have been intentional
B. the employee must
be at least 25 years old
C. the age
discrimination cannot be intentional
D. the employee must
be at least 40 years old
6.
Best Buy Company manufacturers smart phones. Best Buy is like most corporations in that
its officers are hired by the firm’s
A. Board of
Directors
B. Incorporators
C. Shareholders
D. None of the above
7.
Ralph is a director of Happy Days, Inc. Without telling Richard, Ralph goes into
business with Sad Days, Inc., in competition with Richard. Ralph is liable for
A. Breach of the
duty of loyalty
B. Breach of the duty
of duty of care
C. Violating the
business judgment rule
D. Indemnification
of the corporation
8.
Ravenous Corporation wants to gain control of Meek
Company. The companies negotiate for
several months, without coming to terms.
Ravenous decides to pursue a takeover attempt. Meek decides to resist. Meek issues its stockholders additional
shares at a low price so as to make Ravenous’s takeover attempt prohibitively
expensive. This is a
A. Poison pill
B. Scorched earth
tactic
C. Pac-Man defense
D. Crown jewel
9.
Lori remodels Craig’s home. Craig doesn’t pay Lori in a timely
manner. Lori has the following options:
A. Ultra Vires
B. Guaranty
C. Surety contract
D. Mechanic’s lien
10.
Apple Corporation’s employment handbook states that
employees will be dismissed only for good cause. Jill, an employee, is dismissed because her
supervisor didn’t like her dress.
If Jill sues Apple, a court could
hold that
A. There is an
implied contract on the terms in the manual
B. There is no
contract because Tom doesn’t have a formal written agreement
C. That Tom can file
a Title VII suit based on the protected class of being a bad dresser
D. Tom was not
qualified because he did not sign a written employment agreement
11.
Jill is seventeen years old. Jill
A. Cannot work in a
hazardous occupation
B. Cannot work
during school hours
C. Must obtain a
permit to work
D. None of the above
12.
Cheap Things, Inc. employs 550 workers in six
states. Cheap Things, Inc. cannot discriminate
in the hiring of employees for reasons of
A. Height
B. Educational
background
C. Union affiliation
D. None of the above
13.
Lisa works at Build-A-Bear at Mayfair
mall. She is the store manager and earns
$35,000 a year. The maximum number of
hours that Lisa can work per week without overtime pay is
A. Thirty-five
B. Fourty
C. Sixty
D. Unlimited
14.
Cortina Asset Management wants to expand into London
but they don’t have the capital. The bank asks that one of their clients, Mr.
X, guarantee the loan for expansion. Mr.
X executes a guaranty of Cortina’s loan.
Mr. X is liable:
A. For the entire
amount of the loan, regardless of whether Cortina can pay
B. For half of the
loan and Cortina the other half
C. For the entire
amount of the loan only after the bank tries to collect from Cortina
D. Has no liability
because these types of loans are illegal
15.
Fast Food, Inc. licenses Greg to operate a
restaurant under the Fast Food name.
This is
A. A chain-style
business operation franchise
B. A distributorship
franchise
C. A manufacturing
or processing-plant franchise
D. None of the above
16.
Quick Pizza is operated as a partnership. For tax purposes, Quick Pizza
A. Is a tax-paying
entity
B. Is not required
to pay taxes
C. Pays ½ of the
taxes if there are two partners
D. Pays ¼ of the
taxes if there are three partners
17.
Under which act would Justin be charged with insider
trading
A. Securities Act of
1933
B. Securities Act of
1934
C. Securities Act of
1935
D. Sarbanes-Oxley
18.
Which type of bankruptcy exist as a reorganization
A. Chapter 7
B. Chapter 11
C. Chapter 12
D. Chapter 13
19.
The entity where someone is most free to make
business decisions and run the day-to-day
business exists with:
A. Partnership
B. Sole proprietorship
C. Limited liability
company
D. Corporation
20.
Workers compensation only covers worker who
A. Are injured on
the job
B. Successfully sue
their employers for negligence
C. Whose injuries
occurred on the job and were intentional
D. Who are
completely disabled
21.
The Family Medical Leave Act applies to employees
who have more than
A. Five employees
B. Ten employees
C. Fifty employees
D. One thousand
employees
22.
Sue applies for a job with Regular Stores, Inc., but
is not hired. Sue believes that she was
not hired for reasons of discrimination.
If Sue files a suit against Regular Stores and a case is established,
she
A. Loses the suite
B. Wins the suit if
Regular Stores cannot prove that they didn’t hire for other reasons
C. Wins the suit
regardless of Regular Store’s response
D. Wins the suit
only if the EEOC issues a right to sue letter
23.
Which of the following is NOT criteria used to
determine whether a worker is categorized as an employee versus an independent
contractor
A. How much control
the employer exercises over the details of the work
B. How much the
person is paid
C. How long the
person is employed
D. Whether the
employer supplies the tools at the place of work
24.
National Manufacturing Corporation (NMC) is a
private employer involved in a Title VII employment discrimination suit. Punitive damages may be recovered against NMC
only if the employer
A. Acted with malice
or reckless indifference
B. Can easily afford
to pay the amount
C. Has one hundred
or more employees
D. None of the above
25.
Phil, a fifty-year-old, is replaced in his job at
Reinhardt Company by Chaz, a twenty-two-year-old. To succeed with an age-discrimination claim
against Reinhardt, Phil will have to show that Chaz
A. Is not a member
of a protected age group
B. Is not qualified
for Phil’s position
C. Often makes
discriminatory statements
D. None of the above
26.
Which of the following items will NOT be discharged
in bankruptcy
A. Student loans
B. Cash advances
totaling more than $500
C. 401k accounts
D. Primary
automobile loans
27.
Pet’s Pizza Inc., grants a franchise to Randy to
operate a Pete’s pizza restaurant.
Pete’s Pizza may charge Randy
A. A license fee
only
B. A price for
supplies only
C. A license fee and
a price for supplies
D. None of the above
28.
Which of the following factors will the court
consider when determining whether to pierce the corporate veil
A. How many
employees exist
B. Whether the
company is set up to make a profit
C. Whether the owner
also owns other businesses
D. Whether the owner
influences employees in their day-to-day operations
29.
Sam is a shareholder of Urban Sales, Inc.
(USI). A court might hold Sam personally
liable for USI’s debts if
A. Sam’s personal
interests are commingled with USI’s interest to the extent that USI has no
separate identity
B. USI calls more
than the required number of shareholders’ meetings
C. USI is over
capitalized
D. Any of the above
30.
Gamma Corporation and Omega Corporation, like other
business corporations, most likely issue securities to
A. Increase their
market share
B. Increase their
visibility
C. Obtain financing
D. Reduce their
production costs
31.
Coast-to-Coast Distribution, Inc., is a direct-mail
distribution company. Like most
corporations, Coast-to-Coast’s employees include its
A. Board of
directors
B. Officers
C. Shareholders
D. None of the above
are employees
32.
Frosty Drinks Corporation distributes soft drinks in
the Midwest.
Frosty’s board of directors can delegate some of its functions to the
firm’s
A. Incorporators
B. Officers
C. Shareholders
D. None of the above
33.
Ace Tool Corporation and Best Hardware Company
combine so that all that remains after the papers have been signed is Ace Tool
Corporation. This is
A. A consolidation
B. A merger
C. A purchase of
assets
D. A purchase of
stock
34.
Delta Corporation merges with Echo Corporation. It is agreed that Echo will absorb Delta. On
merging
A. Delta will
continue as the surviving corporation
B. Echo will
continue as the surviving corporation
C. A new distinct
corporation is formed
D. Both corporations
are dissolved
35.
Digital Equipment Corporation and Electronics, Inc.,
plan to consolidate. The plan must be
approved by
A. Their boards of
directors only
B. Their
shareholders only
C. Their board and
their shareholders
D. None of the above
36.
When a manufacturer licenses a dealer to sell its
product this is known as
A. Manufacturing
arrangement
B. distributorship
C. chain-style
business operation
D. global initiative
37.
Mike is a stockbroker. Which law regulates Mike?
A. The Securities
Act of 1933
B. The Securities
Act of 1934
C. The Securities
Act of 1940
D. The Securities
Act of 1992
38.
Gail, a salesperson for International Sales, Inc.
(ISI), learns that ISI will increase the dividend it pays to shareholders. Gail buys 1,000 shares of ISI stock. When the price of the stock increases, Gail
sells her shares for a profit. Gail
would not be liable for insider trading if the
information about
the dividend was
A. Material when she
sold the stock
B. Public before she
bought the stock
C. Public after she
bought the stock
D. Too speculative
when she bought the stock
39.
Computer Networks, LLC, is a limited liability
company. Unless indicated otherwise on
Computer Networks’ federal tax form, the firm will be taxed as
A. A corporation
B. A partnership
C. A sole
proprietorship
D. None of the above
40.
Ron, an employee of Standard Company, is
injured. For Ron to receive workers
compensation, the injury must be
A. Accidental and
arise out of a preexisting disease or condition
B. Accidental and
occur on the job or in the course of employment
C. Intentional and
arise out of a preexisting disease or condition
D. Intentional and
occur on the job or in the course of employment
41.
Panther Co. is worried Badger, Inc. is interested in
a hostile takeover. Panther has no interest
in merging or becoming part of Badger.
The Directors of Panther negotiate retirement packages in case they
can’t stop the merger to try and fight the merger. This strategy is known as
A. Pac-Man
B. Golden Parachute
C. Poison Pill
D. White Knight
42.
Mega Corporation provides health insurance for its
employees. When Mega closes one of its
offices and terminates the employees, COBRA allows the employees
A. to collect
“severance pay” equal to twelve weeks’ of health insurance coverage
B. continue their
health insurance at Mega’s expense for 18 months
C. continue their
health insurance at their own expense for 18 months
D. lose their health
insurance immediately
43.
Ann is an employee of Beta Communications
Corporation. Ann attempts to resolve a
gender-based discrimination claim with Beta, whose representative denies the
claim. Ann’s next best step is to
A. Ask the Equal
Opportunity Employment Commission (EEOC) whether a claim is justified
B. File a lawsuit
C. Forget about the
matter
D. Secretly sabotage
the company operations for revenge
44.
Ann owns Enterprises, Inc., a sole
proprietorship. Ann’s liability for the
obligations of the business is
A. Limited by state
statute
B. Limited to the
amount of her original investment
C. Limited to the
total amount of capital Ann invests in the business
D. Unlimited
45.
Holly owns International Imports. She hires Jay as a salesperson, agreeing to
pay $10,00 per hour plus 10 percent of his sales. Holly and Jay are
A. Partners for the
duration of Jay’s employment
B. Partners, because
Holly pays Jay an hourly wage
C. Not partners,
because Jay does not have an ownership interest or management rights in the
business
D. Partners because
Jay receives a commission, not a share of the profits
46.
Responsibility for the overall management of Beta,
Inc., a corporation, is entrusted to
A. The board of
directors
B. The corporate
officers and managers
C. The owners of the
corporation
D. The promoters of
the corporation
47.
Pat is a director of Quick Buy, Inc. Without informing Quick Buy, Pat goes into
business with Fast Sales, Inc. to compete with Quick Buy. This violates
A. The business
judgment rule
B. The duty of
loyalty
C. The mailbox rule
D. Pat’s appraisal
rights
48.
Bill is considering forms of business organizations
for his Web-site consulting firm. Most
states require that a limited liability company have
A. No members
B. At least one
member
C. At least five
members
D. A board of
directors
49.
Frank, an officer of Gamma, Inc., learns that Gamma
has developed a new source of energy.
Frank tells Gail, an outsider.
They each buy Gamma stock. When
the development is announced, the stock price increases, and they each
immediately sell their stock. Subject to
liability for insider trading is
A. Frank only
B. Gail only
C. Frank and Gail
D. None of the above
50.
Ann’s Retail, a women’s clothing store, hires female
attendants to assist clients in the store’s dressing rooms. Larry, a male, applies for, and is refused, a
job as an attendant. Larry then sues
Ann’s Retail for employment discrimination under Title VII. Against the suit, the store has
A. An affirmative
action defense
B. An after-acquired
evidence defense
C. A bona fide
occupational qualification defense
D. A business
necessity defense
