BUS125 Business Law test 4

Question 1

1. A partner is jointly, but not severally, liable for all partnership obligations.

True

False

1 points

Question 2

1. A partner may pursue his or her own interest without automatically violating the fiduciary duties that he or she owes to the firm.

True

False

1 points

Question 3

1. Ace Accountants, LLP, is a limited liability partnership. The law governing Ace includes

	a.	limited liability company law.
	b.	partnership law.
	c.	sole proprietorship law.
	d.	none of the above.

1 points

Question 4

1. A close corporation may restrict the right of a shareholder to transfer stock.

True

False

1 points

Question 5

1. A public corporation is the same as a private corporation.

True

False

1 points

Question 6

1. A board of directors generally makes major corporate policy decisions.

True

False

1 points

Question 7

1. A director is a fiduciary of a corporation.

True

False

1 points

Question 8

1. A perfected security interest will always have priority over an unperfected security interest.

True

False

1 points

Question 9

1. Ace Credit Corporation and Best Loans, Inc., lend money to City Tire Company (CTC), and simultaneously perfect their security interests in City's tires. Dina buys a set of the tires from CTC. On CTC's default, the party with priority to the tires that Dina bought is:

	a.	Ace.
	b.	Best.
	c.	CTC.
	d.	Dina.

1 points

Question 10

1. American Investments, Inc., and First State Bank are secured parties with security interests in property owned by U.S. Manufacturing Corporation. Priority between these security interests is determined by

	a.	the amount of the claim.
	b.	the custom in the trade.
	c.	the time of perfection.
	d.	the time the security agreement was signed.

1 points

Question 11

1. Ann owes Ben $500 on their contract, but refuses to pay. To collect, Ben files a mechanic's lien, under which security for the debt is represented by:

	a.	Ann's personal property.
	b.	Ann's real estate.
	c.	the $500 owed under the contract.
	d.	the contract.

1 points

Question 12

1. A writ of attachment is a court order to seize a debtor's property after the entry of a final judgment in a creditor's lawsuit against the debtor.

True

False

1 points

Question 13

1. A contract of suretyship must be in writing to be enforceable

True

False

1 points

Question 14

1. An order for relief in a bankruptcy proceeding amounts to a discharge of the debts of the party petitioning for bankruptcy protection.

True

False

1 points

Question 15

1. Any debtor who is liable on a claim held by a creditor may file for bankruptcy.

True

False

1 points

Question 16

1. Attachment ensures that the security interest between a debtor and secured party is effective.

True

False

1 points

Question 17

1. A security agreement creates or provides for the priority of a security interest between a creditor and a third party.

True

False

1 points

Question 18

1. A person must be a shareholder of a corporation to serve as a director.

True

False

1 points

Question 19

1. Ben, who runs a livestock breeding business, owes the Circle C Ranch $40,000. Ben agrees to pay the Cirlce C a percentage of his profits each month until the debt is paid off. Because of this agreement, the Circle C is:

	a.	Ben's creditor and partner.
	b.	Ben's creditor only.
	c.	Ben's partner only
	d.	neither Ben's creditor nor his partner.

1 points

Question 20

1. Cody and Diana form Eagle Corporation. Eagle has a board of directors, a chief executive officer, a chief operating officer, and fifty-two shareholders. Eagle is governed by its

	a.	board of directors.
	b.	incorporators.
	c.	officers.
	d.	shareholders.