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WorksheetsREG 2nd test
Total questions: 54
Worksheet time: 5hrs 30mins
Which of the following statements is correct concerning the similarities between a limited partnership and a corporation?
Each is created under a statute and must file a copy of its documentation with the proper state authorities.
All corporate stockholders and all partners in a limited partnership have limited liability.
Both are recognized for federal income tax purposes as taxable entities.
Both are allowed statutorily to have perpetual existence.
The apparent authority of a partner to bind the partnership in dealing with third parties
Will be effectively limited by a formal resolution of the partners of which third parties are aware.
Will be effectively limited by a formal resolution of the partners of which third parties are unaware.
Would permit a partner to submit a claim against the partnership to arbitration.
Must be derived from the express powers and purposes contained in the partnership agreement.
Which of the following rights is a holder of a public corporation's cumulative preferred stock always entitled to?
Conversion of the preferred stock into common stock
Voting rights.
Dividend carryovers from years in which dividends were not paid to future years.
Guaranteed dividends.
Which of the following is an advantage of forming a limited liability company (LLC) as opposed to a partnership?
The entity may avoid taxation
The entity may have multiple owners.
The owners may participate in management while limiting personal liability.
The owners may receive allocations and distributions disproportionately.
Which of the following forms of business generally provides all owners with limited liability while avoiding federal taxation of income at the entity level?
C corporation.
S corporation
Partnership
Limited partnership
The limited liability of a stockholder in a closely-held corporation may be challenged successfully if the stockholder
Undercapitalized the corporation when it was formed
Formed the corporation solely to have limited personal liability.
Sold property to the corporation
Was a corporate officer, director, or employee.
A general partnership must
Pay federal income tax
Have two or more partners.
Have written articles of partnership.
Provide for apportionment of liability for partnership debts
Baker sold an automobile to Old Autos Depot, Inc., where Fuller is a manager. Fuller took $100 from Baker for encouraging the sale. What duty to Old Autos Depot, Inc., did Fuller violate?
Reasonable care.
Reimbursement
Obedience
Loyalty
In a general partnership, which of the following acts must be approved by all the partners?
Dissolution of the partnership.
Admission of a partner
Authorization of a partnership capital expenditure.
Conveyance of real property owned by the partnership
Which of the following entities must pay taxes for federal income tax purposes?
General partnership
Limited partnership
Joint venture
C corporation.
The main difference between S corporations and C corporations is
Their tax treatment.
Their ability to have voting and nonvoting stock
Their limited liability of their shareholders
Their structure of their corporate management
Two CPAs organized their business as a general partnership. Which of the following advantages may have played a role in their selection of the general partnership form under the Revised Uniform Partnership Act?
The partnership form of business organization allowed them to form their business without the requirement of filing organizational documents with a government agency.
The partners' risk of loss from the business is limited to the amount of capital each invested in the business.
The partnership has a perpetual life that is not affected by a partner's expulsion or withdrawal.
The partnership can raise capital with sale of common stock
Which of the following deeds contains a warranty that the grantee will not be disturbed in possession of the property by the grantor or some third party's lawful claim of ownership?
Deed of trust.
Quitclaim deed.
Special warranty deed
General warranty deed
Which of the following parties is (are) responsible for enforcing federal air and water quality standards?
Both industry associations and political action groups
Industry associations, not political action groups
Political action groups, not industry associations.
Neither industry associations nor political action groups
Which of the following unities (elements) are required to establish a joint tenancy?
Time, title, interest, and possession.
Time and title only
Interest and possession only.
Time and interest only.
In which of the following lease situations will an item of the tenant's personal property become a fixture?
An expensive oil painting is hung on the office wall's permanent wall hooks
A chandelier is installed in the ceiling light box of an apartment's dining room.
A bike rack is attached to a leased car's pre-installed trailer hitch
A flatscreen television is attached to the conference room wall's full motion, extendable wall mount.
A purchaser who obtains real estate title insurance will
Have coverage for the title exceptions listed in the policy.
Be insured against all defects of record other than those excepted in the policy
Have coverage for title defects that result from events that happen after the effective date of the policy.
Be entitled to transfer the policy to subsequent owners.
Which of the following provisions must be included to have an enforceable written lease?
Party responsible for repairs and maintenance.
Due date for the payment of rent
Party responsible for paying utilities.
Description of the leased premises
Which of the following statements is (are) correct regarding the methods a target corporation may use to ward off a takeover attempt?
I. The target corporation may make an offer (“self-tender”) to acquire stock from its own shareholders.
II. The target corporation may seek an injunction against the acquiring corporation on the grounds that the attempted takeover violates federal antitrust law.
I only.
II only
Both I and II.
Neither I nor II.
For a deed to be effective between a grantor and grantee in a transfer of real property that is not a sale, one of the conditions is that the deed must
Be recorded within the permissible statutory time limits
Be delivered by the grantor with an intent to transfer title.
Contain the market value of the property.
Contain the signatures of the grantor and grantee.
Which of the following statements is the best definition of real property?
Real property is only land
Real property is all tangible property, including land.
Real property is land and intangible property rights involving land.
Real property is land and everything permanently attached to it.
What is an example of property that can be considered either personal property or real property?
Air rights.
Mineral rights
Harvested crops.
Growing crops
Which of the following requirements must be met, by any type of deed, in order for title to real property to be transferred?
The deed must be delivered to the purchaser of the property.
The deed must be recorded by the seller of the property.
The deed must include a statement of the property's value.
The deed must include a general warranty of title.
What interest in real property generally gives the holder of that interest the right to sell the property?
Easement
Leasehold
License
Fee simple
Which of the following is correct regarding foreclosure of a purchase money mortgage by judicial sale of the property?
The mortgagor has the right to any remaining sale proceeds after the mortgagee is paid
The purchaser at the sale is liable for any deficiency owed the mortgagee.
The court must confirm any price received at the sale
The mortgagor can never by liable for a deficiency owed the mortgagee
Which of the following items is generally considered to be personal property?
Plumbing fixtures sold as part of the sale of a house.
Crops sold as part of the sale of land.
Copyrights.
Air rights.
Which of the following actions would most likely be an infringement of the exclusive rights of the owner of a copyrighted work?
Preparing a foreign language translation of the copyrighted work
Writing a book review of the copyrighted work that includes excerpts from the work.
Making multiple copies of extracts from the copyrighted work for classroom use
Using the copyrighted work for research
The primary purpose for enacting workers' compensation statutes was to
Eliminate all employer-employee negligence lawsuits
Enable employees to recover for injuries regardless of negligence
Prevent employee negligence suits against third parties
Allow employees to recover additional compensation for employer negligence
When the original tenant of real property subleases the property to a third party (sublessee), who is responsible for the payment of the rent to the owner of the property?
The sublessee only
The original tenant only
The original tenant for half and the sublessee for half
Both the sublessee and the original tenant jointly and severally
What contractual duty does a principal owe to a gratuitous agent?
Duty of diligence.
Duty to compensate.
Duty to indemnify
Duty of obedience
Orr gives North power of attorney. In general, the power of attorney
Will be valid only if North is a licensed attorney at law.
May continue in existence after Orr's death
May limit North's authority to specific transactions
Must be signed by both Orr and North
Young was a purchasing agent for Wilson, a sole proprietor. Young had the express authority to place purchase orders with Wilson's suppliers. Young conducted business through the mail and had little contact with Wilson. Young placed an order with Vanguard, Inc. on Wilson's behalf after Wilson was declared incompetent in a judicial proceeding. Young was aware of Wilson's incapacity. With regard to the contract with Vanguard, Wilson (or Wilson's legal representative) will
Not be liable because Vanguard dealt only with Young
Not be liable because Young did not have authority to enter into the contract.
Be liable because Vanguard was unaware of Wilson's incapacity
Be liable because Young acted with express authority.
Clarett, who owned a retail business, left a note on a desk Clarett thought was occupied by Franklen. The note stated, "Please contract to purchase 20,000 widgets at the best possible price from Eisen Corp. for delivery in March." The desk was actually being used by Saranz, who made a contract for the purchase of the widgets as specified. Saranz had little negotiating experience and contracted for a high price. Which of the following statements is correct regarding the authority held by Saranz?
Saranz had apparent, but not actual, authority to make the contract, so the contract is not enforceable by Eisen.
Saranz did not have any authority to make the contract, so the contract is not enforceable by Eisen
Saranz had actual authority to make the contract, so the contract is enforceable by Eisen
Saranz had authority by ratification, so the contract is enforceable by Eisen
Noll gives Carr a written power of attorney. Which of the following statements is correct regarding this power of attorney?
It must be signed by both Noll and Carr.
It must be for a definite period of time.
It may continue in existence after Noll's death.
It may limit Carr's authority to specific transactions.
Which of the following actions requires an agent for a corporation to have a written agency agreement?
Purchasing office supplies for the principal's business.
Purchasing an interest in undeveloped land for the principal
Hiring an independent contractor to landscape the principal's land.
Hiring a debt collector to collect a business debt owed the principal
North, Inc. hired Sutter as a purchasing agent. North gave Sutter written authorization to purchase, without limit, electronic appliances. Later, Sutter was orally told not to purchase more than 300 of each appliance. Sutter contracted with Orr Corp. to purchase 500 tape recorders. Orr had been shown only Sutter's written authorization. Which of the following statements is correct?
Sutter will be liable to Orr because Sutter's actual authority was exceeded
Sutter will not be liable to reimburse North if North is liable to Orr
North will be liable to Orr because of Sutter's actual and apparent authority.
North will not be liable to Orr because Sutter's actual authority was exceeded.
A principal and agent relationship requires a
Written agreement.
Power of attorney.
Meeting of the minds and consent to act
Specified consideration
After which of the following situations would it usually not be necessary to notify third parties of the termination of an agency's existence?
The achieving of the agency's purpose
The destruction of the subject matter of the agency
A termination by mutual agreement
A termination by the principal
Trent was retained, in writing, to act as Post's agent for the sale of Post's memorabilia collection. Which of the following statements is correct?
To be an agent, Trent must be at least 21 years of age.
Post would be liable to Trent if the collection were destroyed before Trent found a purchaser.
Post has a duty to make Trent the exclusive agent to sell the memorabilia
Both Trent and Post must consent to the agency
Ace Corporation engaged Kosier, CPA, to perform a consulting engagement. While driving to Ace's office, Kosier was involved in an automobile accident in which Norton was injured. The accident was solely Kosier's fault. If Norton sues both Ace and Kosier for the injuries Norton sustained, what will be the result?
Both Kosier and Ace will be liable.
Kosier will be liable, and Ace will not be liable because Kosier is an independent contractor.
Ace will be liable under the principle of respondeat superior, and Kosier will not be liable
Ace will be liable because of Kosier's actual authority, and Kosier will not be liable.
Easy Corp. is a real estate developer and regularly engages real estate brokers to act on its behalf in acquiring parcels of land. The brokers are authorized to enter into such contracts but are instructed to do so in their own names without disclosing Easy's identity or relationship to the transaction. If a broker enters into a contract with a seller on Easy's behalf.
The broker will have the same actual authority as if Easy's identity had been disclosed
Easy will be bound by the contract because of the broker's apparent authority.
Easy will not be liable for any negligent acts committed by the broker while acting on Easy's behalf.
The broker will not be personally bound by the contract because the broker has express authority to act.
Strong Corp. filed a voluntary petition in bankruptcy under the reorganization provisions of Chapter 11 of the Federal Bankruptcy Code. A reorganization plan was filed and agreed to by all necessary parties. The court confirmed the plan and a final decree was entered. Which of the following statements best describes the effect of the entry of the court's final decree?
Strong Corp. will be discharged from all its debts and liabilities
Strong Corp. will be discharged only from the debts owed creditors who agreed to the reorganization plan.
Strong Corp. will be discharged from all its debts and liabilities that arose before the date of confirmation of the plan.
Strong Corp. will be discharged from all its debts and liabilities that arose before the confirmation of the plan, except as otherwise provided in the plan, the order of confirmation, or the Bankruptcy Code
Dart Inc., a closely held corporation, was petitioned involuntarily into bankruptcy under the liquidation provisions of Chapter 7 of the Federal Bankruptcy Code. Dart contested the petition.
Dart has not been paying its business debts as they became due, has defaulted on its mortgage loan payments, and owes back taxes to the IRS. The total cash value of Dart’s bankruptcy estate after the sale of all assets and payment of administration expenses is $100,000.
Dart has the following creditors:
Fracon Bank is owed $75,000 principal and accrued interest on a mortgage loan secured by Dart’s real property. The property was valued at and sold, in bankruptcy, for $70,000. The IRS has a $12,000 recorded judgment for unpaid corporate income tax. JOG Office Supplies has an unsecured claim of $500 that was timely filed. Nanstar Electric Co. has an unsecured claim of $1,200 that was not timely filed. Decoy Publications has a claim of $16,500, of which $2,000 is secured by Dart’s inventory that was valued and sold, in bankruptcy, for $2,000. The claim was timely filed.
Assuming that the bankruptcy estate was distributed, what dollar amount would the IRS receive?
$0
$8,000
$10,000
$12,000
Which of the following acts will always result in the total release of a compensated surety?
The creditor extends the principal debtor's time to pay by three weeks
The creditor failed to disclose the debtor's bad credit rating to the surety.
The place of payment is changed to another state.
The principal debtor's obligation is partially released
Which of the following is an action between a debtor and its creditors that will release the debtor from its debts?
Composition agreement
Exoneration
Assignment for the benefit of creditors
Subrogation
The federal Fair Debt Collection Practices Act prohibits a debt collector from engaging in unfair practices. Under the Act, a debt collector generally can be prevented from
Contacting a third party to ascertain a debtor's location.
Continuing to collect a debt.
Communicating with a debtor who is represented by an attorney.
Commencing a lawsuit to collect a debt
Under the federal Bankruptcy Code, an involuntary petition in bankruptcy may not be filed against which of the following parties?
A stockbroker.
A farmer.
A postal worker
A railroad employee
Which of the following statements regarding a creditor's rights against a surety is correct?
The surety is primarily liable to the creditor
A surety does not have the right of subrogation
The creditor must collect payment from the surety through a wage garnishment.
The creditor must first attempt to collect the debt from the primary debtor before being able to collect from the surety.
Which of the following acts always will result in the total release of a compensated surety?
The creditor changes the manner of the principal debtor's payment
The creditor extends the principal debtor's time to pay
The principal debtor's obligation is partially released.
The principal debtor's performance is tendered
Under the Secured Transactions Article of the UCC, all of the following are needed to create an enforceable security interest, except
A security agreement must exist.
The secured party must give value
The debtor must have rights in the collateral.
A financing statement must be filed.
Nash, Owen, and Polk are co-sureties with maximum liabilities of $40,000, $60,000 and $80,000, respectively. The amount of the loan on which they have agreed to act as co-sureties is $180,000. The debtor defaulted at a time when the loan balance was $180,000. Nash paid the lender $36,000 in full settlement of all claims against Nash, Owen, and Polk. The total amount that Nash may recover from Owen and Polk is
$0
$24,000
$28,000
$140,000
Which of the following events will release a noncompensated surety from liability?
Filing of an involuntary petition in bankruptcy against the principal debtor.
Insanity of the principal debtor at the time the contract was entered into with the creditor.
Release of the principal debtor's obligation by the creditor but with the reservation of the creditor's rights against the surety.
Modification by the principal debtor and creditor of their contract that materially increases the surety's risk of loss
Jones files for protection under Chapter 7 of the federal Bankruptcy Code. Which of the following debts will be discharged?
Six months of child support in arrears.
Six months of alimony due to Jones' former spouse.
Federal taxes due on Jones' timely filed tax return for the prior year
A secured claim by a creditor relating to Jones' purchase of an appliance.
Ingot Corp. lent Flange $50,000. At Ingot's request, Flange entered into an agreement with Quill and West for them to act as compensated co-sureties on the loan. Later, Quill consented to Ingot's release of West. After West's release, Flange defaulted on the loan. Which of the following statements is correct?
Quill will be liable for 50% of the loan balance.
Quill will be liable for the entire loan balance
Flange will be released for 50% of the loan balance.
Flange will be released for the entire loan balance
