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Study Resources (Business Management)

41.If the financial status of a corporation drastically changes before the record date, a declared cash or property dividend can be revoked. 42.Shareholders generally have liability for the debts and obligations of the corporation beyond their capital contribution. 43.Shareholders can lose their limited liability if a corporation has been operated without the.
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111.Which types of partners in a limited partnership should participate in management? a.General partners only. b.Limited partners only. c.Both general and limited partners. d.General partners only, unless there are no general partners, and in that case, limited partners participate in management. 112.Which of the following best describes who may be a partner in a limited.
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21.When a material person’s lien is properly filed, the real property to which the improvements have been made becomes security for the payment of these services. ] 22.Unlike mortgage liens, material person’s liens are not subject to the debtor’s right of redemption. 23.Revised Article 9 of the UCC governs secured transactions in personal.
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51.Delaware is the preferred site for incorporation of the largest corporations in the United States. 52.Officers of a corporation are usually selected by the shareholders. 53.Generally, a corporate director is liable for mistakes in judgment. 54.The duty of care that must be exercised by corporate directors is the care that an ordinary prudent.
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77.What type of relationship is created when a customer makes a deposit into her account at a bank? a.Principal-agent b.Trustee-beneficiary c.Donor-donee d.Creditor-debtor 78.Which of the following is correct about the Uniform Commercial Code? a.Article 3 covers negotiable instruments; Article 4 covers bank deposits and collections. b.Article 2 covers both negotiable instruments as well as bank deposits and.
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31.A negotiable instrument cannot be made payable to multiple payees. 32A holder is a person in possession of a negotiable instrument regardless of whether it has been properly indorsed to him or to his order. 33.A holder in due course can acquire greater rights than his transferor had. 34.A holder is the same.
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67.Negotiation of which type(s) of instrument requires indorsement? a.Bearer instruments only b.Order instruments only c.Both bearer and order instruments d.Neither bearer nor order instruments 68.What effect can indorsements have on the character of negotiable instruments? a.Indorsements can convert bearer paper to order paper, but not vice versa. b.Indorsements can convert order paper to bearer paper, but not.
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MULTIPLE CHOICE QUESTIONS 81.The major disadvantage of a sole proprietorship is: a.The difficulty and cost of formation. b.The unlimited liability for the business’s debts. c.The sharing of management authority with others. d.The difficulty in transferring ownership to others. 82.If a business, having one owner, is started without the owner choosing any particular form of business organization,.
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MULTIPLE CHOICE QUESTIONS 61.Which of the following is not a characteristic of a corporation? a.Unlimited liability of owners b.Free transferability of shares c.Perpetual existence d.Centralized management 62.The uniform law, issued in 1984 by the Committee on Corporate Laws of the American Bar Association, that regulates the formation, operation, and termination of corporations is: a.The Model Business Corporation.
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11.A sole proprietor has the exclusive right to receive all the profits of the business. 12.The purpose of requiring the filing of fictitious business names is to allow the public to know the true owner of businesses operating under fictitious names. 13.A sole proprietor is personally liable for the debts of the.
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51.The U.S.  Supreme Court ruled that a medical malpractice judgment based on negligent or reckless conduct and not intentional conduct is dischargeable in bankruptcy. 52.In a Chapter 11 case, the debtor usually continues to operate the business as a debtor-in-possession. 53.In certain circumstances, a company in reorganization bankruptcy may reject a collective.
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Chapter 17 TRUE/FALSE QUESTIONS 1.The shares of a corporation can generally be sold without the approval of the other shareholders. 2.A corporation cannot be established that has a fixed termination date. 3.The shareholders of a corporation are not personally liable for the debts of that corporation. 4.A corporation ceases to exist if a shareholder dies,.
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31.A proxy may validly be given orally or in writing. 32.The bylaws of a corporation may require a “supermajority” vote for certain issues. 33.The preemptive right allows shareholders with sufficient shares of stock the right to be on the board of directors. 35.A shareholder’s resolution is the written document that a shareholder signs.
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11.A traveler’s check is issued without a named payee. 12.The issuing bank serves as both the drawer and drawer of a cashier’s check. 13.Both checks and notes have makers. 14.A promissory note is an unconditional written promise by one party to pay money to another party. 15.A note and I.O.U. are names for the.
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57.Which of the following is characteristic of both cashier’s checks and traveler’s checks? a.Requirement of a countersignature when used b.Usually available only in certain fixed denominations c.Must be certified before they can be negotiated d.They are frequently issued by companies other than banks. e.The same party serves as both the drawee and drawer. 58.Which of the.
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Chapter 14 TRUE/FALSE QUESTIONS 1.One of the common functions of negotiable instruments is as a substitute for money. 2.The Revised Article 3 of the Uniform Commercial Code is called “Negotiable Instruments” rather than “Commercial Paper.” 3.The Revised Article 3 of the Uniform Commercial Code establishes rules for the creation, transfer, enforcement, and liability on.
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41.The fact that the Federal Trade Commission has eliminated holder in due course status in connection with consumer credit transactions is a disadvantage for consumers. 42.              When a customer writes a check, a principal-agency relationship is created with the customer as the principal and the bank as the agent. 43.              Electronic funds.
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21.The liquidation preference of preferred stock means that preferred shareholders receive more in the event of a corporation’s liquidation. 22.Convertible preferred stock is stock that can be converted to stock of another corporation. 23.A debenture is a long-term secured debt instrument. 24.A note is a debt security that has an original maturity of.
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31.Limited partnerships have both limited partners and general partners. 32.A corporation may be a limited partner in a limited partnership. 33.In a limited partnership, the partners can agree that all partners have limited liability. ] 34.A limited partnership must have at least one general and one limited partner. 35.A trust may be a general partner.
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71.Eric, Becky, and Brenda are all licensed medical doctors who form a professional corporation, Dr. Inc., to practice medicine.  They are the only shareholders.  Eric negligently operates on a patient, George, seriously injuring him.  George sues Dr. Inc., Eric, Becky, and Brenda for malpractice.  Assuming that the general rules of.
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141.Which of the following is not an advantage of franchising? a.The franchisor can reach new markets. b.The franchisor gets major tax advantages. c.The franchisee has access to the franchisor’s knowledge and resources. d.Consumers are assured of uniform product quality. 142.Which of the following is not one of the common general forms of franchises? a.Distributorship b.Processing plant c.Manufacturing d.Chain-style e.Area. 143.A Ford.
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Chapter 13 TRUE/FALSE QUESTIONS 1.              One of the uniform laws developed in response to electronic commerce is the Uniform Computer Information Transactions Act. 2.              The Internet was begun in the late 1980s by the U.S. Department of Education. 3.              The Web has made it extremely attractive to conduct commercial activities online. 4.              E-mail is another.
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TRUE/FALSE QUESTIONS 1.Secured credit refers to credit where there is a second party to pay the debt in the event that the original debtor does not. 2.A debtor who is judgment-proof does not have a legal obligation for the payment of debts. 3.If the debtor fails to make payments when due in a.
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MULTIPLE CHOICE QUESTIONS—LEGAL CONCEPTS 35.Which of the following statements is true about the Internet? a.It was begun in the 1970s. b.It was started by the National Aeronautics and Space Administration. c.It had more than 1,000 computers connected by 1980. d.Its original purpose was to develop communications for military and national defense purposes. 36.In response to Americans.
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101.A partnership agreement: a.Must be in writing for all partnerships. b.Must be an express agreement for all partnerships, but can be oral or in writing. c.May be created inadvertently based on the parties’ conduct. d.Must be in writing, but only for partnerships covered under the Uniform Partnership Act. e.Cannot be implied from the actions of.
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11.Corporations must be incorporated in the states in which they do most of their business. 12.When choosing a corporate name, it is important to determine whether the name selected is available as a domain name. 13.The articles of incorporation must be approved by the state before the corporation can officially come into.
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11.The parties to a mortgage are the mortgagor, mortgagee, and the beneficiary. 12.The recording of a mortgage does not affect the rights and duties of the borrower and lender with     respect to one another. 13.Foreclosure is another word for the taking of possession of collateral. 14.A deficiency in connection with a foreclosure is.
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  MULTIPLE CHOICE QUESTIONS—LEGAL CONCEPTS 60.Which of the following is true about the distinction between secured and unsecured credit? a.Secured debt is debt that has already been paid, and unsecured has not yet been paid. b.Secured debt is expected to be collected, whereas collection of unsecured debt is doubtful. c.Secured debt will be collected over.
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31.A purchase money security interest in a motor vehicle is covered by the automatic perfection rule. 32A termination statement is a document filed by the secured party that ends a secured interest because the debt has been paid. 33.A termination statement is filed by the debtor when a secured debt is paid.
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45.Under the Anticybersquatting Consumer Protection Act, which of the following is true? a.Prior approval by the affected celebrity is needed to obtain a domain name that is similar to a celebrity’s name. b.Penalties are imposed for obtaining any domain name that infringes on a valid trademark. c.Domain names are granted only after ensuring.
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71.An automobile dealership is an example of a distributor franchise. 72.Most fast-food franchises are distributor franchises. ] 73.A company that has a franchise to manufacture and distribute Coca-Cola has a processing plant franchise. 74.Assuming that a franchise agreement establishes the franchisee as an independent contractor in relation to the franchisor, the franchisor and franchisee.
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MULTIPLE CHOICE QUESTIONS—LEGAL CONCEPTS 47.Which of the following is true about the law governing negotiable instruments? a.Somewhat fewer than half the states adopted the original version of Article 3 of the UCC. b.Most negotiable instrument law is contained in federal statutes. c.The most recent version of Article 3 of the UCC was released in.
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91.The two general types of shareholders’ meetings are: a.Annual and special. b.Annual and quarterly. c.General and annual. d.General and special. 92.What is the purpose of cumulative voting? a.To enforce a supramajority voting requirement b.Voting on mergers and other fundamental changes to the corporation c.Voting to pay dividends d.A, B, and C e.To give a minority shareholder a better opportunity to.
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21.              An intellectual property licensing arrangement is a method used to transfer certain rights of use, but not ownership, of intellectual property. 22.              Under the Uniform Computer Information Transactions Act, consumers are held responsible for electronic errors such as ordering more copies than intended if there was a confirmation procedure and.
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11.              The most commonly used to-level extension for domain names is .net. 12.              The Anticybersquatting Consumer Protection Act protects any individual’s name from being registered by another person. 13.              The Anticybersquatting Consumer Protection Act protects against bad faith registrations of domain names only if the domain name is trademarked. 14.              The World Intellectual.
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51.Limited liability companies are authorized by federal law. 52.An LLC is a separate legal entity. 53.In an LLC, all owners have limited liability. ] 54.The owners of LLCs are called shareholders. 55.The Uniform Limited Liability Company Act is a model act that has been adopted by all states. 56.The name of an LLC must indicate in.
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Chapter 16 TRUE/FALSE QUESTIONS 1.Ease and cost of formation have little to do with the selection of the form under which a business should operate. 2.Sole proprietorships are the most common form of business organization in the United States. 3.A large business cannot be operated as a sole proprietorship. 4.A sole proprietor owns all of.
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81.Which of the following statements is true? a.The number of shares provided for in the articles of incorporation is called authorized shares. b.A corporation may not repurchase their own shares after they have been issued. c.A corporation may vote its treasury stock. d.The corporation must sell all of the authorized stock. 82.If preferred stock is.
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41.Where a partner who erroneously believed she was a limited partner dealt with a third party who believed in good faith that she was a general partner, the partner will be treated as a general partner. 42.A foreign limited partnership is one that was formed in a different state. 43.Limited partnerships properly.
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80.Which of the following is not one of the general categories of goods subject to a security interest under Article 9 of the UCC? a.Consumer goods b.Equipment c.Building materials d.Farm products e.Inventory 81.Which of the following is true about security agreements and financing statements? a.These are two terms for essentially the same document. b.Both must be filed in.
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121.Where there is no agreement in a limited partnership regarding the allocation of profits, how are they allocated?                                         Equally among all the partners                                         One half equally among the general partners, one half equally among the limited partners                                          Among all partners, in proportion to capital invested in the partnership                                         None of.
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21.An express partnership agreement is necessary in order for a partnership to exist. 22.Partnerships are not permitted to operate under fictitious business names. 23.An attempt by a partnership to include a provision in its partnership agreement that differs from the Uniform Partnership Act will be ineffective. 24.Partners are permitted to sue the partnership.
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90.What is the general concept of the fresh start in bankruptcy? a.Debtors are given a new start in paying off their existing debts. b.Creditors are given a new start in collecting amounts owed to them. c.Businesses adopt a new plan of business. d.Debtors have most debts discharged and start over without those debts. 91.Which of.
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41.In a Chapter 7 bankruptcy, a trustee must be appointed. 42.A proof of claim is not required to be filed by a secured creditor. 43.The bankruptcy estate includes all property that the petitioner receives after the petition is filed. 44.States may pass their own exemption laws, which may be either mandatory or optional.
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