Question 1
1.    Donald authorizes Alice to purchase 200 units of a certain electronic component. Alice identifies a suitable vendor and places the order. Alice bribes the vendor to have the goods delivered. Which of the following statements is true of this scenario?

If Donald accepts the goods purchased by Alice, agency by ratification occurs.

Alice has not fulfilled her duty of accounting to Donald.

Duty of reimbursement and indemnification does not require Donald to reimburse the bribe paid by Alice.

Duty of compensation requires Donald to reimburse the bribe paid by Alice.
3 points
Question 2
1.    Which of the following statements is true about the liability of principals for the acts of their agents?

Principals are responsible whenever the agents commit torts or criminal acts.

Principals are never responsible for any of the torts committed by their agents.

A principal is responsible only for the torts committed within the scope of the agent’s employment.

A principal is liable for torts committed by the agent if the agent was in an unauthorized place at the time of commission of the tort.
3 points
Question 3
1.    Which of the following statements is true of the duty of reimbursement and indemnification?

It bars agents from claiming expenses arising out of negligence or unlawful activities.

It requires a principal to compensate an agent for services rendered even in the absence of a written agreement.

It mandates that a principal should pay a contingency fee to an agent upon conclusion of the business transaction.

It forbids a principal from interfering with the reasonable conduct of an agent as agreed upon in a contract.
3 points
Question 4
1.    Agency agreements that will last up to six months must be in writing according to the statute of frauds.
True
False
3 points
Question 5
1.    Apparent authority for an agent to act is created by the words or actions of the agent.
True
False
3 points
Question 6
1.    Which of the following holds true for the royalty fee paid by a franchisee?

It is a lump-sum payment for the privilege of being granted a franchise.

It is a fee for promotional campaigns and administrative costs.

It is a fee for the continued use of a franchisor’s trade name.

It is a payment for any land or equipment leased from a franchisor.
3 points
Question 7
1.    Which of the following is a characteristic of a public corporation?

The lifetime of the organization is limited to the lifetime of the decision-making committee or the Chief Executive Officer, whichever is longer.

Profits are taxed as income to corporation and again as income to owners when distributed as dividends.

Ownership interests are generally limited to no more than 35 shareholders.

Owners can exert control over daily management decisions.
3 points
Question 8
1.    Which of the following is a disadvantage of the sole proprietorship form of business organization?

The proprietor is personally liable for all losses incurred by the proprietorship.

The proprietor does not get to retain all profits of the business.

The proprietorship suffers double taxation.

Establishing the proprietorship requires more forms and other legal formalities than any other form of organization.
3 points
Question 9
1.    A joint stock company is treated as a partnership because its members own shares that are nontransferable.
True
False
3 points
Question 10
1.    A disadvantage of a syndicate is that it cannot raise large amounts of capital quickly.
True
False
3 points
Question 11
1.    Wheelz Enterprises, a car manufacturer, is a closely held corporation. Profits are taxed to the owners as ordinary income but not to the corporation as a unit. The owners have mutually agreed that their total number will never exceed 35 and that none of the shareholders can be a non-resident alien. In this scenario, Wheelz is an example of a(n) ________ corporation.

professional

Subchapter S

eleemosynary

Subchapter C
3 points
Question 12
1.    Which of the following statements is true when creating a corporation in the U.S.?

Each of the 50 states has a general incorporation statute that stipulates the articles of incorporation to be used in that state.

Incorporation is a federal matter and requires the recording of articles of incorporation with the U.S. Secretary of State.

Corporations cannot be created without the enactment of a local ordinance in the city or county where the corporate headquarters is to be located.

Corporations are created by private agreement and do not require the filing of any documents with a government official.
3 points
Question 13
1.    An unsecured long-term corporate loan is called a ________.

bond

note

debenture

share
3 points
Question 14
1.    Those corporations whose stock is traded on the national securities exchanges are known as publicly held corporations.
True
False
3 points
Question 15
1.    What is the difference between the vacation benefits for workers offered by the U.S. and those offered by European countries?

The United States offers employees typically up to two weeks of vacation benefits, whereas European countries do not allow employees more than a week’s vacation time.

Employers in most European nations grant vacation benefits to workers but workers in the United States are not allowed any vacation benefits.

Unlike the United States, most European nations mandate a minimum amount of annual vacation time for employees.

European countries mandate that employees must work on public holidays to compensate for their vacation, whereas in the U.S., workers are granted a minimum paid vacation time.
3 points
Question 16
1.    Which of the following records must an employer maintain for a nonexempt employee to ensure that he or she complies with the Fair Labor Standards Act?

employee’s Social Security number

names of employee’s parents

employee’s date of resignation from his or her previous job

wage earned by the employee at his or her previous job
3 points
Question 17
1.    Which of the following is true of the Occupational Safety and Health Agency?

Its fixed budget allows it to perform the same number of inspections every year.

Its safety standards are unanimously supported by labor unions across all industries.

It has to communicate the date of inspection to an employer one day in advance.

It undertakes educational programs among employers and employees.
3 points
Question 18
1.    The Occupational Safety and Health Review Commission is an independent review body before which an employer can contest the issuance of a citation by the Occupational Safety and Health Administration.
True
False
3 points
Question 19
1.    Which of the following is true of the National Labor Relations Board (NLRB)?

It is composed of five members, three of whom are appointed by the president.

It determines whether workers want to be represented by a union.

The board meets in New York.

It is responsible for enforcing the Landrum-Griffith Act.
3 points
Question 20
1.    Which of the following statements is true about routine unfair labor practice cases brought before the National Labor Relations Board (NLRB)?

They are initially brought to the main headquarters in Washington, D.C., and are then handled by one of the NLRB’s 34 regional offices.

They are prosecuted by regional directors of NLRB’s 34 regional offices before administrative law judges.

They are handled initially by the judicial system, with appeals being made to the appropriate NLRB regional office.

They are prosecuted by a five-member panel at New York.
3 points
Question 21
1.    The ________ serves as prosecutor in unfair labor practice cases.

general counsel of the National Labor Relations Board

county district attorney

private attorney representing the side bringing the unfair labor practice charge

general counsel of the Department of Labor
3 points
Question 22
1.    It is not unlawful for an employer to refuse to allow workers to post organizing notices on a company bulletin board on which employees have previously been allowed to post only “for sale” cards.
True
False
3 points
Question 23
1.    Executive exemption is an exemption to the ADEA that allows mandatory retirement of executives at age ________.

50

65

45

55
3 points
Question 24
1.    Any affirmative action plan that can withstand constitutional muster must ________.

use quotas or preferences

balance the workforce by decreasing employment of minorities

attempt to remedy past discrimination

decrease the representation of women in the workforce
3 points
Question 25
1.    The Civil Rights Act of 1871 was designed to effectuate the Thirteenth Amendment and guarantees that all persons in the United States have the same right to make and enforce contracts and have full and equal benefit of the law.
True
False