Questions and Answers of Essentials of Business Law

A legal and ethical obligation placed upon a director to administer to the affairs of the corporation with personal integrity, honesty, and candor.a. articles of incorporationb. corporationc. duty of
A business formed as a separate legal entity.a. articles of incorporationb. corporationc. duty of cared. duty of loyaltye. partnershipf. joint v enture g. limited liability company h. limited pa
A business owned and operated by one person.a. articles of incorporationb. corporationc. duty of cared. duty of loyaltye. partnershipf. joint v enture g. limited liability company h. limited pa
A business owned and operated by two or more persons.a. articles of incorporationb. corporationc. duty of cared. duty of loyaltye. partnershipf. joint v enture g. limited liability company h. limited
A legal document that lists the general powers of a corporation.a. articles of incorporationb. corporationc. duty of cared. duty of loyaltye. partnershipf. joint v enture g. limited liability company
A type of corporation that is taxed as a partnership.a. articles of incorporationb. corporationc. duty of cared. duty of loyaltye. partnershipf. joint v enture g. limited liability company h. limited
A legal and ethical obligation placed upon a director to act diligently and prudently in conducting the affairs of the corporation.a. articles of incorporationb. corporationc. duty of cared. duty of
A business in which there are one or more general partners and one or more limited partners.a. articles of incorporationb. corporationc. duty of cared. duty of loyaltye. partnershipf. joint v enture
An activity in which individuals become partners for only a short period of time, or for only a single project.a. articles of incorporationb. corporationc. duty of cared. duty of loyaltye.
Indicate whether each of the following statements is true or false by writing T or F in the answer c olumn.The great majority of small businesses in the United States are organized as limited
Indicate whether each of the following statements is true or false by writing T or F in the answer c olumn.The major disadvantage of a sole proprietorship is the fact that the owner of the
Indicate whether each of the following statements is true or false by writing T or F in the answer c olumn.A disadvantage of a sole proprietorship is the diffi culty the owner faces in raising money
Indicate whether each of the following statements is true or false by writing T or F in the answer c olumn.In a partnership, the shares of the partners might be equal or they might vary according to
Indicate whether each of the following statements is true or false by writing T or F in the answer c olumn.In a partnership, it is necessary that profi ts and losses be shared in the same percentages.
Indicate whether each of the following statements is true or false by writing T or F in the answer c olumn.In a partnership, the expulsion of one of the partners must always be for cause.
Indicate whether each of the following statements is true or false by writing T or F in the answer c olumn.During the winding-up period, there is an orderly liquidation of the partnership assets.
Indicate whether each of the following statements is true or false by writing T or F in the answer c olumn.While a partnership itself does not pay federal income taxes, it does complete an
Indicate whether each of the following statements is true or false by writing T or F in the answer c olumn.Each partner is an agent for all other partners.
Indicate whether each of the following statements is true or false by writing T or F in the answer c olumn.A limited partner is allowed to participate in the overall management of the business, and
Indicate whether each of the following statements is true or false by writing T or F in the answer c olumn.Courts have granted corporations similar constitutional rights to those granted to
Indicate whether each of the following statements is true or false by writing T or F in the answer c olumn.A corporation usually has bylaws, which provide rules for the meetings of the corporation.
Indicate whether each of the following statements is true or false by writing T or F in the answer c olumn.Corporations may freely give both charitable contributions and political contributions.
Indicate whether each of the following statements is true or false by writing T or F in the answer c olumn.Corporations continue to live on unless some formal action is taken to discontinue the
Indicate whether each of the following statements is true or false by writing T or F in the answer c olumn.The shareholders who own the corporation directly manage the activities of the fi rm.
How can a sole proprietor go about attracting employees who are trustworthy?
Corporations have been granted freedom of speech, freedom from unreasonable searches and seizure, and due process of law. Does it make sense that a legal (as opposed to natural) person has these
Holley and Holley, an interracial couple, alleged that they were the victims of discrimination in housing as a result of actions by Crank, an employee of Triad, Inc. The Holleys sued Meyer, the sole
Dale, an assistant scoutmaster for the Boy Scouts, lost his position when the organization learned that he was gay. Dale contended that he was the victim of discrimination while the Boy Scouts argued
Melvin and his brother Russell Ballantyne formed an oral partnership, which started out as a farming operation but which grew into oil and gas exploration. Russell was in charge of the farming
A person who is in possession of commercial paper.a. bad c heckb. draft or bill of exchangec. cashier’s c heckd. certifi ed checke. checkf. drawee g. drawer h. holder i. maker j. negotiability k.
An instrument that is essentially a depositor’s order to his or her bank to pay money to a party named on the instrument.a. bad c heckb. draft or bill of exchangec. cashier’s c heckd. certifi ed
A characteristic of a credit instrument that allows its transfer from one party to another.a. bad c heckb. draft or bill of exchangec. cashier’s c heckd. certifi ed checke. checkf. drawee g. drawer
A type of commercial paper that is essentially a written promise t pay money to a designated party.a. bad c heckb. draft or bill of exchangec. cashier’s c heckd. certifi ed checke. checkf. drawee
The party to commercial paper who makes a promise to pay.a. bad c heckb. draft or bill of exchangec. cashier’s c heckd. certifi ed checke. checkf. drawee g. drawer h. holder i. maker j.
The party to commercial paper who is designated as the one to receive payment.a. bad c heckb. draft or bill of exchangec. cashier’s c heckd. certifi ed checke. checkf. drawee g. drawer h. holder i.
The party to a draft against whom it is drawn.a. bad c heckb. draft or bill of exchangec. cashier’s c heckd. certifi ed checke. checkf. drawee g. drawer h. holder i. maker j. negotiability k. payee
The party who draws a draft against another.a. bad c heckb. draft or bill of exchangec. cashier’s c heckd. certifi ed checke. checkf. drawee g. drawer h. holder i. maker j. negotiability k. payee
A check drawn against an account with insuffi cient funds or against a bank in which the drawer has no funds.a. bad c heckb. draft or bill of exchangec. cashier’s c heckd. certifi ed checke.
A check that bears a date later than the date on which the check was written.a. bad c heckb. draft or bill of exchangec. cashier’s c heckd. certifi ed checke. checkf. drawee g. drawer h. holder i.
A check for which the bank ensures that the drawer has suffi cient funds to make payment.a. bad c heckb. draft or bill of exchangec. cashier’s c heckd. certifi ed checke. checkf. drawee g. drawer
A notice to a bank requesting that a certain check not be paid.a. bad c heckb. draft or bill of exchangec. cashier’s c heckd. certifi ed checke. checkf. drawee g. drawer h. holder i. maker j.
A check drawn against a bank’s own funds.a. bad c heckb. draft or bill of exchangec. cashier’s c heckd. certifi ed checke. checkf. drawee g. drawer h. holder i. maker j. negotiability k. payee l.
An unconditional written order from one party to another directing him or her to pay a certain sum to a third party.a. bad c heckb. draft or bill of exchangec. cashier’s c heckd. certifi ed checke.
A check on which the amount has been altered to increase it.a. bad c heckb. draft or bill of exchangec. cashier’s c heckd. certifi ed checke. checkf. drawee g. drawer h. holder i. maker j.
Indicate whether each of the following statements is true or false by writing T or F in the answer c olumn.The law presumes that commercial paper was issued for value.
Indicate whether each of the following statements is true or false by writing T or F in the answer c olumn.A subsequent holder of commercial paper can have no greater rights than the original holder.
Indicate whether each of the following statements is true or false by writing T or F in the answer c olumn.The words “pay to the order of” are required for an instrument to have negotiability.
Indicate whether each of the following statements is true or false by writing T or F in the answer c olumn.A stale check is one that is presented six months or more after it was written or issued.
Indicate whether each of the following statements is true or false by writing T or F in the answer c olumn.The main purpose of a certifi ed check is to ensure that funds are on deposit to cover the
Indicate whether each of the following statements is true or false by writing T or F in the answer c olumn.A person who adds his or her name to a promissory note to strengthen it is known as a
Indicate whether each of the following statements is true or false by writing T or F in the answer c olumn.A bank can refuse to honor a depositor’s check even if it is properly drawn and there are
Indicate whether each of the following statements is true or false by writing T or F in the answer c olumn.A postdated check is one that is written subsequent to the date appearing on the instrument.
Indicate whether each of the following statements is true or false by writing T or F in the answer c olumn.The Uniform Commercial Code provides that a reasonable length of time for demand for payment
Indicate whether each of the following statements is true or false by writing T or F in the answer c olumn.If a depositor requests in a timely manner his or her bank to stop payment on a check
Wiggins had a checking account at her local bank. She wrote out a check to Shin, a maintenance worker, in payment for services he had provided.a. Is Wiggins the drawee?b. Is Shin the drawee?c. Is her
Grove Hotel hired Fortas, an electrical contractor, and paid him with a promissory note for $3,400. The note stated that it was “with interest at prevailing bank rates.” Did the stipulation about
Graver gave Srau a postdated check for $2,000 as a deposit on a sailboat as acceptance of Srau’s offer to sell the boat. Later, after Srau sold the boat to someone else, he claimed that the check
Higgins was a used-car dealer. He purchased a Corvette, giving the seller a draft drawn by him on the First State Bank of Albertville in the amount of $8,115. This draft was later presented by the
After Balkus died intestate, included among Balkus’s possessions were bank deposit slips for a savings account owned by him. On each deposit slip was a handwritten notation, “Payable to Ann
An indorsement by which the payee of an instrument transfers it to the order of another person.a. bearer ins trumentb. blank indors ementc. counterclaimd. dishonormente. holder in due coursef.
The person who writes his or her name on the back of an instrument.a. bearer ins trumentb. blank indors ementc. counterclaimd. dishonormente. holder in due coursef. indorsee g. indorsement h.
The person to whom an instrument is transferred.a. bearer ins trumentb. blank indors ementc. counterclaimd. dishonormente. holder in due coursef. indorsee g. indorsement h. indorser i. material a
The practice of the holder of commercial paper of writing his or her name on the back of an instrument.a. bearer ins trumentb. blank indors ementc. counterclaimd. dishonormente. holder in due
An indorsement that transfers an instrument but limits the liability of the indors er.a. bearer ins trumentb. blank indors ementc. counterclaimd. dishonormente. holder in due coursef. indorsee g.
An indorsement that transfers an instrument to whoever has possession of it.a. bearer ins trumentb. blank indors ementc. counterclaimd. dishonormente. holder in due coursef. indorsee g. indorsement
An indorsement that limits the transfer of an instrument to a particular person or for a particular purpose.a. bearer ins trumentb. blank indors ementc. counterclaimd. dishonormente. holder in due
A person who has accepted commercial paper in good faith, for value, before maturity, and without notice of any defects in the instrument.a. bearer ins trumentb. blank indors ementc. counterclaimd.
A claim for not paying commercial paper that relates to the circumstances leading to the issuing of the paper rather than to the paper itself.a. bearer ins trumentb. blank indors ementc.
A claim that states that the instrument was void from the beginning.a. bearer ins trumentb. blank indors ementc. counterclaimd. dishonormente. holder in due coursef. indorsee g. indorsement h.
The deduction of amounts owed claimed by the maker of a note or the drawer of a draft from the amount demanded by an immediate party.a. bearer ins trumentb. blank indors ementc. counterclaimd.
Important changes to an instrument that affect the rights of the parties.a. bearer ins trumentb. blank indors ementc. counterclaimd. dishonormente. holder in due coursef. indorsee g. indorsement h.
Exhibiting a note to its maker and demanding payment.a. bearer ins trumentb. blank indors ementc. counterclaimd. dishonormente. holder in due coursef. indorsee g. indorsement h. indorser i. material
Refusal to pay a commercial paper.a. bearer ins trumentb. blank indors ementc. counterclaimd. dishonormente. holder in due coursef. indorsee g. indorsement h. indorser i. material a lteration j.
An instrument that is payable to anyone who is in possession of it.a. bearer ins trumentb. blank indors ementc. counterclaimd. dishonormente. holder in due coursef. indorsee g. indorsement h.
Indicate whether each of the following statements is true or false by writing T or F in the answer c olumn.The writing a holder puts on the back of a negotiable instrument is known as a negotiation.
Indicate whether each of the following statements is true or false by writing T or F in the answer c olumn.An indorsement of an instrument must be for the entire amount.
Indicate whether each of the following statements is true or false by writing T or F in the answer c olumn.The Uniform Commercial Code attributes an implied warranty to an indorsed instrument that
Indicate whether each of the following statements is true or false by writing T or F in the answer c olumn.An indorser of an instrument is released from liability by any act that discharges the
Indicate whether each of the following statements is true or false by writing T or F in the answer c olumn.If it is apparent that an instrument has been altered, the holder is not a holder in due
Indicate whether each of the following statements is true or false by writing T or F in the answer c olumn.An instrument indorsed in blank is payable to anyone in possession of it.
Indicate whether each of the following statements is true or false by writing T or F in the answer c olumn.An instrument with a special, or full, indorsement is payable only to the person named in
Indicate whether each of the following statements is true or false by writing T or F in the answer c olumn.A restrictive indorsement prevents further negotiation of an instrument.
Indicate whether each of the following statements is true or false by writing T or F in the answer c olumn.If an instrument indorsed in blank is lost, the fi nder may not legally negotiate it.
Indicate whether each of the following statements is true or false by writing T or F in the answer c olumn.The words “For deposit only” constitute a blank indorsement.
Should an indorsement written in pencil be legally acceptable? Why or why not?
McCutchon wrote a check payable to “cash” while he was in a supermarket. Before he got to the cashier, he realized that he had lost the check. Is this a bearer instrument, payable to any holder?
Poulakis sold a computer using fraudulent means to Welson, who paid for the machine with a promissory note for $1,200. When Welson discovered the fraud, she refused to honor the note when it was
Locke gave two promissory notes to Consumer Food, Inc., in payment for merchandise he purchased. The notes said, “Buyer agreed to pay to seller.”Consumer Food, Inc., assigned the notes to Aetna
Gentilotti, father of an illegitimate son, drew a check for $20,000 in 1969 payable to the son’s order. The check was dated July 1, 1985, but provided on the face of the check that, should
A gift between the living.a. accessionb. adverse pos sessionc. in causa mortisd. eminent doma ine. fee s implef. freehold e state g. grantee h. inter vivos i. joint te nancy j. leasehold e state k.
The right of an owner of property to the product of such property—a calf born to a cow, for example.a. accessionb. adverse pos sessionc. in causa mortisd. eminent doma ine. fee s implef. freehold e
Ownership of property held by one person.a. accessionb. adverse pos sessionc. in causa mortisd. eminent doma ine. fee s implef. freehold e state g. grantee h. inter vivos i. joint te nancy j.
A gift given in anticipation of death.a. accessionb. adverse pos sessionc. in causa mortisd. eminent doma ine. fee s implef. freehold e state g. grantee h. inter vivos i. joint te nancy j. leasehold
A document of transfer of real property.a. accessionb. adverse pos sessionc. in causa mortisd. eminent doma ine. fee s implef. freehold e state g. grantee h. inter vivos i. joint te nancy j.
Absolute ownership of real property.a. accessionb. adverse pos sessionc. in causa mortisd. eminent doma ine. fee s implef. freehold e state g. grantee h. inter vivos i. joint te nancy j. leasehold e
The right of a governmental or public body to acquire privately held real property needed for a public purpose.a. accessionb. adverse pos sessionc. in causa mortisd. eminent doma ine. fee s implef.
The interest in real property that relates to ownership.a. accessionb. adverse pos sessionc. in causa mortisd. eminent doma ine. fee s implef. freehold e state g. grantee h. inter vivos i. joint te
The person to whom real property is conveyed.a. accessionb. adverse pos sessionc. in causa mortisd. eminent doma ine. fee s implef. freehold e state g. grantee h. inter vivos i. joint te nancy j.
The interest a person has in real property that lasts until he or she dies.a. accessionb. adverse pos sessionc. in causa mortisd. eminent doma ine. fee s implef. freehold e state g. grantee h. inter
The interest in real property that relates to possession.a. accessionb. adverse pos sessionc. in causa mortisd. eminent doma ine. fee s implef. freehold e state g. grantee h. inter vivos i. joint te

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