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Business Law
Q:
If a voidable contract is avoided, the parties to it are released from it.
Q:
An executed contract is one that has been fully performed.
Q:
The ________ is a model act that provides comprehensive and uniform laws for the formation, operation, and dissolution of LLCs.
A) Williams Act
B) Securities Exchange Act
C) ULLCA
D) ULPA
Q:
An executory contract is one that has been fully performed.
Q:
Which of the following is true of an LLC?
A) An LLC is a creature of federal law.
B) An LLC is regarded as a separate legal entity.
C) An LLC cannot hold title to property.
D) The owners of an LLC are called general partners or specific partners.
Q:
An implied contract is implied from the words of the parties.
Q:
An LLC is a(n) ________.
A) unincorporated business entity
B) incorporated business entity
C) cooperative entity
D) proprietorship
Q:
Which of the following information should a certificate of limited partnership contain?
A) the latest date of dissolution of the partnership
B) a clause to not accept new general partners
C) the name of the party who becomes a general partner in the event of transfer
D) the scope of potential business opportunities and related investment
Q:
In an express contract, the terms are fully stated in words.
Q:
Which of the following is true of a limited partnership?
A) Other limited partnerships cannot become limited partners in an existing limited partnership.
B) A limited partner is personally liable for the debts of the partnership.
C) Corporations are allowed to become partners in a limited partnership.
D) A limited partnership can have only one general partner but multiple limited partners.
Q:
Informal contracts include all contracts other than formal contracts.
Q:
Justin and Michael form a limited partnership and start a car dealership. Justin is the general partner and Michael is the limited partner. Seven months after the commencement of the business, Pedro makes an investment and wishes to become a general partner. A week later, Michael's mother wishes to join the partnership as a limited partner. Which of the following is true in this scenario?
A) Pedro cannot be admitted as a general partner to the partnership after the business has commenced.
B) Pedro cannot be admitted as a general partner to the partnership as a limited partnership can only have one general partner.
C) Michael's mother cannot be admitted as a limited partner to the partnership as a limited partnership can only have one limited partner.
D) Both Pedro and Michael's mother can choose to be admitted as either general or limited partners to the partnership.
Q:
An implied contract is not an actual contract.
Q:
Which of the following is true of general and limited partners in a limited partnership?
A) Limited partners are exempt from annual capital investment and need only participate in management functions.
B) General partners are not personally liable for partnership debts.
C) General partners are required to invest capital and refrain from managerial activities.
D) Limited partners are not personally liable for partnership debts beyond their capital contributions.
Q:
Which of the following partners of a limited partnership invests capital but does not participate in management?
A) specific partners
B) limited partners
C) general partners
D) sole proprietors
Q:
An express contract must be in writing.
Q:
Informal contracts are usually based on their subÂstance rather than their form.
Q:
Which of the following partners in a limited partnership invests capital, manages the business, and is personally liable for partnership debts?
A) specific partners
B) limited partners
C) general partners
D) sole proprietors
Q:
A limited partnership has two types of partners, ________.
A) general partners and sole proprietors
B) general partners and limited partners
C) ordinary partners and liable partners
D) special partners and sole proprietors
Q:
No offer may be revoked before it is accepted.
Q:
A contract can be created only when a promise is given in exchange for another promise.
Q:
How are assets distributed after the dissolution of a general partnership?
Q:
An offer to form a unilateral contract is accepted by a promise to perform.
Q:
Explain the formation of a general partnership.
Q:
The ________ is a rule which provides that upon the death of a general partner, the deceased partner's right in specific partnership property vests in the remaining partner or partners; it does not pass to his or her heirs or next of kin.
Q:
A bilateral contract comes into existence at the moment an offer is made.
Q:
A(n) ________ is a partnership created with no fixed duration.
Q:
One of the elements of a valid contract is a fair price.
Q:
A(n) ________ is a partnership created for a fixed duration.
Q:
"Consideration" refers to the voluntary consent of all of the parties to a contract.
Q:
Every contract involves at least three parties.
Q:
While claiming under ________ liability, a plaintiff must name the partnership and all of the partners as defendants in a lawsuit.
Q:
The only requirement of a valid contract is that it be voluntarily entered into.
Q:
General partners have ________ liability for the debts and obligations of the partnership.
Q:
If a contractual promise is not fulfilled, the person who made it may be required to perform the promised act.
Q:
The ________ Act is a model act that codifies general partnership law.
Q:
An ordinary partnership is also known as a(n) ________.
Q:
A party's intent to enter into a contract is judged by their personal, subjective intent or belief.
Q:
The dissolution of a general partnership discharges the liability of an outgoing partner for existing partnership debts and obligations.
Q:
Resolving whether a promise should be enforced is a function of contract law.
Q:
The process of liquidating a partnership's assets and distributing the proceeds to satisfy claims against the partnership is known as winding up.
Q:
Some promises are not legally binding.
Q:
A third party who sues to recover on a partnership contract need not name all the general partners in the lawsuit.
Q:
Ophelia, an executive with Pharma Drug Distribution, Inc., has to decide whether to market a product that might have undesirable side effects for a small perÂcentage of users. How should Ophelia deÂcide whether to sell the product? How does the standard of ethics that is applied affect this answer?
Q:
General partners have unlimited personal liability for the debts and obligations of the partnership.
Q:
To assist in detecting illegal bribes, Cut Rite Contractors, Inc., and all U.S. companies, must
a. conceal financial records that reveal past bribes.
b. keep records that "accurately and fairly" reflect financial activities.
c. make bribes through third parties rather than directly to officials.
d. permit payments to foreign officials that are unlawful in that country.
Q:
Bilt-Well Construction Corporation makes a side payment to a governÂment official in Nigeria to obtain a contract. In the United States, this is
a. illegal and unethical.
b. illegal but not unethical.
c. unethical but not illegal.
d. legal and ethical.
Q:
General partners are not permitted to sue the partnership or other partners at law.
Q:
Ethical standards would most likely be considered violated if Retail Mart Corporation deals with a company in a developing nation that
a. agrees to produce goods at Retail Mart's desired price.
b. goes unnoticed by "corporate watch" groups.
c. exploits its workers.
d. pays its workers less than the U.S. minimum wage.
Q:
The right to share in the profitsof the partnership is the right to share in the earnings from the investment of capital.
Q:
Since the income of a partnership must be reported on the individual partners' personal income tax returns, this results in double-taxation of partnership profits.
Q:
Spencer Hydraulics Corporation's ethics committee is asked a business ethics questionshould the firm bid low to obtain a contract that it knows it can fulfill only at a higher price? A practical method to investigate and solve this question involves all of the following steps except
a. absolution.
b. decision.
c. inquiry.
d. justification.
Q:
General partnerships do not pay federal income taxes.
Q:
Fealty Credit Corporation asks its employees to evaluate their actions and get on the ethical business decision-making "bandwagon." Guidelines for judging individual actions include all of the following except
a. an individual's conscience.
b. business rules and procedures.
c. loopholes in the law or company policies.
d. promises to others.
Q:
A general partnership agreement must always be in writing to be considered legal.
Q:
Sunny Energy Corporation engages in ethical behavior solely for the purpose of getÂting good publicity and thereby increasing profits. Sunny is
a. acting unethically in its pursuit of publicity.
b. acting unethically in its pursuit of profits.
c. acting unethically in its setting of priorities.
d. not acting unethically.
Q:
The name selected by a general partnership cannot indicate that it is a corporation.
Q:
BarBQ Sushi Taco Company considers the impact of its corporate decisions on various groups and often acts in the interest of a group that has a greater stake in a decision than BarBQ's shareholders. This is most likely to attract potential employees who are
a. investors focused on short-term profits.
b. irresponsible slackers.
c. politically-motivated complainers.
d. recent college graduates.
Q:
Receipt of a share of business profits is prima facie evidence of a general partnership.
Q:
Applied Business Corporation makes and markets its products nationwide. Under the stakeholder approach, to be considered socially responsible when making a business decision, Applied must take into account the needs of
a. its consumers, the community, and society only.
b. its employees and owners only.
c. its employees, owners, consumers, the community, and society.
d. no one.
Q:
The Revised Uniform Partnership Act is a federal statute that is recognized in all states.
Q:
In deciding questions of corporate social responsibility, Valley Disposal & Recycling, Inc., is concerned with
a. how the corporation can best fulfill any ethical duty to society.
b. the effect on corporate profits of ignoring any ethical duty to society.
c. whether the corporation owes any ethical duty to society.
d. all of the choices.
Q:
The Uniform Partnership Act (UPA) is a model act that codifies sole proprietorship law.
Q:
A common ethical dilemma faced by the management of General Holdings Corporation involves the effect that its decision will have on
a. one group as opposed to another.
b. the firm's competitors.
c. the government.
d. the U.S. Chamber of Commerce.
Q:
In making decisions for United Merchandising Company, Vance uses a cost-benefit analysis. This is part of
a. duty-based ethics.
b. Kantian ethics.
c. the principle of rights.
d. utilitarianism.
Q:
According to priority, which of the following claims is satisfied first after dissolution?
A) creditors
B) creditor-partners
C) capital contributions
D) profits
Q:
In making business decisions, Glenda, personnel manager for HVAC Maintenance, Inc., applies his belief that all persons have fundamental rights. This is
a. a religious rule.
b. the categorical imperative.
c. the principle of rights.
d. utilitarianism.
Q:
________ is a situation in which a partner withdraws from a partnership without having the right to do so at that time.
A) Winding up
B) Indemnification
C) Wrongful dissolution
D) Proliferation
Q:
The change in the relationship of partners in a partnership caused by any partner ceasing to be associated in the carrying on of the business is known as ________.
A) an action for an accounting
B) indemnification
C) winding up
D) dissolution
Q:
Fess, research manager for Greenergy Products, Inc., apÂplies utilitarian ethics to determine that an action is morally corÂrect when it produces the greatest good for
a. Fess.
b. Greenergy.
c. the fewest people.
d. the most people.
Q:
Which of the following is true of the liability of an incoming partner?
A) An incoming partner is liable for the antecedent debts of the partnership.
B) An incoming partner has joint and several liability with existing partners for the antecedent debts of the partnership.
C) An incoming partner is liable for the existing debts of the partnership only to the extent of his or her capital contribution.
D) An incoming partner is not liable for the future debts of the partnership.
Q:
Solid Tool Company's decision makers view a particular risk in the use of Solid's product as open and obvious. Continuing to market the product without telling consumers of the risk could be justified from a perspective of
a. duty-based ethics.
b. Kantian ethics.
c. rights-based ethics.
d. utilitarian ethics.
Q:
Which of the following is true of tort liability of a general partnership?
A) Only the partner who committed the tort is liable.
B) Under the UPA, general partners have joint, but not several, liability for torts committed in the course and scope of the partnership.
C) A partner can be sued even if he or she did not participate in the commission of the tort.
D) If one of the partners in the partnership is released, the other partners are discharged of liability.
Q:
Ryan, the owner of SuperMart Stores, Inc., adheres to the "principle of rights" theory. Under this theory, a key factor in determining whether a business decision is ethical is how that decision affects
a. the right determination under a cost-benefit analysis.
b. the rights of others.
c. the "right" thing to do.
d. the right to make a profit.
Q:
Instead of suing the partnerships or other partners at law, general partners are given the right to bring a(n) ________ against other partners.
A) claim for damages
B) tort action
C) call for action
D) action for an accounting
Q:
Dion, an accountant for Entertainment Sports, Inc., attempts to apply a duty-based approach to ethical reasoning in conflicts that occur on the job. This approach is based on the idea that a person must
a. achieve the greatest good for the most people.
b. avoid unethical behavior regardless of the consequences.
c. conform to society's ethical standards.
d. place his or her employer's interest first.
Q:
Which of the following is true of profits and losses in a general partnership?
A) By law, it is presumed that the proportion of profits shared is equal to the general partner's initial investment.
B) Unless otherwise agreed, losses are shared equally by all general partners.
C) The general partner who proposed the idea of the business receives the greatest share of profits.
D) The proportion of investment governs only the proportion of losses shared and not profits obtained.
Q:
Tilly, the chief financial officer for USA Products Corporation, atÂtempts to apply Christian precepts in making ethical decisions and in doÂing business. In applying duty-based ethical standards that are derived from a religious source, Tilly would consider the motive behind an act to be
a. irrelevant.
b. the least important consideration.
c. the most important consideration.
d. the only consideration.
Q:
Which of the following is true of the management of a general partnership?
A) The number of votes a general partner has depends on the proportion of his or her capital investment.
B) Partnership matters are decided by unanimous agreement only.
C) Only a general partner who is also a member of the partnership's board of directors has the authority to participate in the management of the partnership.
D) If the vote is tied, the action being voted on is considered to be defeated.
Q:
In business deals, Felipe, the chief executive officer of Glazed Donuts, Inc., follows duty-based ethical standards. These are most likely derived from
a. a corporate ethics code.
b. a cost-benefit analysis.
c. philosophical reasoning.
d. the law.