Term
| What is the purpose of informal agency actions? |
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Definition
| To provide advance notice that formal rulemaking may be forthcoming |
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Term
| Which action has the government implemented in order to minimize health care costs? |
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Definition
| Insurance companies must spend at least 80% of individual premiums on benefits or pay a rebate to the insured. |
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Term
| Which act did Congress pass in 2011 to give the Food and Drug Administration (FDA) greater authority to recall any food products suspected to be tainted? |
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Definition
| Food Safety Modernization Act |
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Term
| A specialized debt-collection agency contacted a consumer at his home at four o’clock in the morning to collect a past due medical bill owed by the consumer’s mother. During the call, the collection agency harassed and threatened the consumer if payment of the debt was not forthcoming. |
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Definition
| The Fair Debt Collection Practices Act |
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Term
| What is the purpose of the Comprehensive Environmental Response, Compensation, and Liability Act? |
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Definition
| To regulate the cleanup of hazardous waste disposal sites |
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Term
| Which act regulates the cleanup of hazardous waste disposal sites? |
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Definition
| Comprehensive Environmental Response, Compensation and Liability Act |
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Term
| What is the purpose of Section 2 of the Clayton Act? |
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Definition
| To prohibit price discrimination agreements |
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Term
| A certified public accountant (CPA) is engaged to perform an audit for a company. During the course of the audit, the CPA accepts explanations from management of financial data irregularities that seem to indicate fraud. The CPA issues a clean opinion on the company’s financial statements. Investors extend additional funding to the company based on the financial statements issued by the CPA. A short time later, the company declares bankruptcy and closes. The investors suffer losses and file a motion to sue the CPA for gross negligence due to fraud. Which type of fraud did this CPA engage in? |
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Definition
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Term
| How does the Private Securities Litigation Reform Act of 1995 impact the liability of accountants? |
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Definition
| By limiting an accountant’s liability to a proportionate share of the damage resulting from a wrongful act |
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Term
| Which worker is eligible for unemployment compensation under the Federal Unemployment Tax Act? |
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Definition
| A staff member who is involuntary terminated and actively seeking employment |
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Term
| Which employer requirement is included in Davis-Bacon Act? |
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Definition
| Paying prevailing rates to all employees paid with federal funds |
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Term
| Which act ensures employees have the right to a duly designated representative who bargains collectively on their behalf? |
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Definition
| National Labor Relations Act |
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Term
| Which remedy is available to an employee who is discriminated against because of a disability, according to the Americans with Disabilities Act? |
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Definition
| The Equal Employment Opportunity Commission (EEOC) can sue on behalf of an employee |
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Term
| Which federal provision requires the plaintiff to show that unlawful bias is the primary reason for an adverse employment action? |
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Definition
| The Age Discrimination Employment Act |
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Term
| Candidate A is a 35-year-old man with 10 years of work experience. Candidate B is a 50-year-old woman with 25 years of work experience. Both candidates interview for a job at the county prison working with male prisoners. Candidate A is hired over Candidate B. Candidate B sues for discrimination. The court finds for the prison, and the case is dismissed. Which type of discrimination defense did the prison successfully employ? |
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Definition
| Bona fide occupational qualification |
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Term
| Who owns the copyright for work that is completed for an employer? |
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Definition
| Independent contractors own the copyright for work that they complete for an employer unless otherwise stated in a work for hire agreement. |
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Term
| Which act by a party terminates an agency relationship? |
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Definition
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Term
| Which type of agency relationship is formed by express consent or implied by conduct. |
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Definition
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Term
| What is one duty of an agent to the principal in an agency relationship? |
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Definition
| The agent must employ usual and customary efforts and skill in completing the agreed-upon assignment. |
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Term
| What is one remedy for a principal against an agent who has breached fiduciary duties? |
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Definition
| Recovering any benefits or profits that were obtained by virtue of the agency relationship |
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Term
| How does an agent exercise implied authority? |
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Definition
| By acting in a manner indirectly understood by custom or inferred from the position the agent occupies |
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Term
| How does an agent exercise apparent authority? |
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Definition
| By acting when the principal causes a third party to believe that the agent has the authority to act |
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Term
| A cable repairman, who is employed by a cable company, travels to various service locations as part of his job. One afternoon, while driving to a service call, he negligently runs a stop sign and causes an accident. A woman is injured in the car accident. |
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Definition
| The repairman and the cable company are liable to the woman because the repairman caused the accident. |
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Term
| Mr. A and Mr. B are partners in a CPA firm. Both partners manage client bank accounts. Mr. A embezzles from a client account. Can Mr. B’s personal assets be attached to pay off any financial liabilities resulting from the embezzlement? |
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Definition
| Yes. Mr. A is acting as an agent of the company; as partners, Mr. A and Mr. B share financial liabilities. |
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Term
| How does the Uniform Commercial Code (UCC) provide a single integrative framework for commercial transactions? |
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Definition
| By covering sales of goods by merchants |
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Term
| What is one requirement of a firm offer for the formation of a sales and lease contract? |
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Definition
| It must be signed by the offeror. |
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Term
| Company X submits a sales and lease contract to Company Y. Company Y modifies the agreement and sends it back to Company X. Why is the contract still enforceable under the Uniform Commercial Code (UCC) rules? |
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Definition
| The modification allows for the acceptance to be upheld. |
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Term
| Company A, located in the United States, submits an offer to Company B. Company B is located in Spain. Company B makes a change to the payment terms, signs, and returns the contract to Company A. Has there been an enforceable contract formed under the Contracts for the International Sale of Goods (CISG)? |
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Definition
| The contract is unenforceable because the CISG considers an alteration of payment terms to be a material change. |
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Term
| An American music performance group offered entertainment services at a contracted price to a charity group, a British corporation, for a fundraising event. The offer was made and imposed a ten-day acceptance window. The charity group immediately accepted the offer and transmitted its acceptance via an overnight courier service. Three weeks later, the music group had not yet received a reply to its offer and accepted another engagement. The overnight courier service then delivered the charity group acceptance to the music group. Noting the conflict, the music group informed the charity group that it had accepted another engagement. The charity group protested and expressed that there was a contract that should be honored. How would the Contracts for the International Sale of Goods (CISG) rule on this scenario? |
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Definition
| This is a service, so the CISG would not apply. |
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Term
| A local heating oil distributor purchases a 25% interest in a container of oil. When does risk of ownership take place? |
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Definition
| When the oil seller/owner passes title to the local heating oil distributor |
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Term
| Business A signs a lease agreement with Business B to lease a labeling machine. The lease agreement includes a destination contract. Business A is located in New Hampshire. The labeling machine is shipped free on board (FOB) to New Hampshire and is damaged in transit. Which business assumes the risk for the damage to the labeling machine? |
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Definition
| Business B assumes the risk, because the risk of loss transfers to Business A when goods are delivered. |
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Term
| When a sale is made on credit, when does the credit period begin, according to the Uniform Commercial Code (UCC)? |
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Definition
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Term
| What are two requirements of the buyer under the Uniform Commercial Code (UCC) when there are products that are sight unseen? |
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Definition
| Payment for goods for which reasonable opportunity for inspection expired and Acceptance of part of a shipment where goods are defective and cannot be replaced prior to expiration of contract terms |
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Term
| Seller A signs a contract with Buyer B. The contract states that Seller A will ship one truckload of wood every month for twelve consecutive months. Seller A ships the first shipment in January and the second shipment in February. Seller A realizes that Buyer B has not made payment for the first shipment as outlined in the contract. The non-payment is a breach of contract. Which legal remedy is available to Seller A for this breached contract? |
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Definition
| The right to stop the shipment in transit, return it to Seller A’s facility, and discontinue any further deliveries |
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Term
| How does the United Nation’s Convention on Contracts for the International Sale of Goods (CISG) provide legal remedies when there is a breach of international sales contracts? |
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Definition
| It provides the seller a release from contract obligations when the buyer breaches the contract. |
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Term
| What is one characteristic of an express warranty? |
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Definition
| An affirmation of fact from the seller of the quality and feature of a good |
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Term
| When does an implied warranty of fitness arise in connection with the sale of a good? |
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Definition
| When the good has a particular purpose, and the buyer relies on the merchant’s judgment to select the good |
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Term
| What are two examples of order to pay negotiable instruments? |
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Definition
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Term
| Mr. A borrowed $1,000 from Mrs. X. He constructed a note promising to pay back the loan. Mr. A wrote “I, Mr. A, will pay Mrs. X the money that I borrowed as soon as I am able.” The note was signed “Mr. A.” Which two requirements need to be added to make this note a negotiable instrument? |
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Definition
| It must be an unconditional order to pay and It must be a stated, fixed amount. |
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Term
| Jane A. writes an order to pay Martha B. The order to pay states: “I, Jane A., owe Martha B. $1,000. I will pay Martha B. the full amount when I receive payment from Acme Manufacturing for invoice number 1234.” Jane A. signs with her initials but does not date the document. The document is scanned and emailed to Martha B. Which element is needed to make this a valid negotiable instrument? |
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Definition
| The instrument must be an unconditional promise or order to pay |
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Term
| What is the legal effect of a special indorsement? |
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Definition
| It identifies the person to whom the instrument is payable. |
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Term
| Mr. A pays a debt to Mr. B with a one hundred dollar bill. The police later inform Mr. B that Mr. A. had stolen the money. Is Mr. B a holder in due course? |
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Definition
| Yes; Mr. B acted in good faith, which impacts holder in due course status |
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Term
| Mr. X loans his girlfriend, Miss A, money. Miss A signs a note payable to Mr. X for the debt. Mr. X receives a check in full payment for the debt from Miss A. Mr. X rips up the check and the note and tells her she does not need to pay him back. One week later, Miss A breaks up with Mr. X. He then asks her for a replacement check for payment on the debt. Is Miss A liable for the debt? |
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Definition
| Miss A is no longer liable for the debt because Mr. X intentionally cancelled the debt by destroying the check and note. |
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Term
| Mr. B was charged with caring for an elderly aunt who had been declared by a court to be mentally incompetent. The aunt disagreed with the court’s decision and insisted that she could manage her own affairs. One day while the aunt was home alone, a salesman came by selling security systems, and the aunt decided to purchase a system. She gave the salesman a check for $3,000 to cover equipment and installation. Mr. B found out about the purchase and stopped payment on the check. What defense did Mr. B apply in this scenario? |
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Definition
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Term
| What is a bank’s liability regarding an altered check that has been honored? |
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Definition
| It is not liable if it asserts customer contributory negligence and the bank has exercised ordinary care |
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Term
| What is one challenge of electronic fund transfer (EFT)? |
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Definition
| Consumers risk potential unauthorized access to personal data and fraudulent transactions. |
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Term
| What is the function of a garnishment when a debtor defaults? |
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Definition
| It permits a creditor to collect a debt by seizing property of the debtor that is held by a third party. |
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Term
| What is one characteristic of a fixed-rate mortgage? |
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Definition
| It has an interest rate that is set for the duration of the mortgage loan. |
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Term
| Under the statute of frauds, what would affect the surety’s obligation to pay a third parties debt? |
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Definition
| A compensated surety is partially released if a creditor’s modification of the obligation is not disclosed to the surety. |
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Term
| When is a debtor’s real property exempt from creditors’ actions? |
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Definition
| Some real property is exempt from execution or attachment to ensure the debtor retains shelter. |
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Term
| What is the definition of a security agreement? |
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Definition
| An agreement that creates or provides for a security interest |
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Term
| What is a Uniform Commercial Code-1 (UCC-1) financing statement? |
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Definition
| A document that provides a creditor with ownership rights to collateral in the event of a debtor’s default |
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Term
| What is one step the creditor must perform when creating a security interest? |
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Definition
| Including material variations in names in order to prevent the financing statement from being ruled as misleading |
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Term
| What are two requirements for creating a security interest? |
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Definition
| The security agreement contains a description that reasonably identifies the collateral and The secured party gives to the debtor something of sufficient enough value to support the contract. |
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Term
| What is one of the general rules of priority between debtors and creditors in secured transactions? |
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Definition
| Perfected security interests generally have priority over other interests. |
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Term
| In which circumstance does a buyer have a priority claim to the collateral perfected by a creditor? |
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Definition
| When the buyer purchases the item for personal use and is unaware that the secured creditor has a perfected security interest |
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Term
| How does Chapter 7 of the Bankruptcy Code provide relief for debtors? |
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Definition
| Through liquidation of a person’s nonexempt assets and distribution to creditors |
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Term
| Why is a reorganization bankruptcy filed? |
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Definition
| To allow a debtor to continue its business operations while working with its creditors to form a reorganization plan for remaining debt |
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Term
| Which provision within a repayment plan determines approval for debt adjustment? |
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Definition
| Payment of claims entitled to priority, such as taxes |
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Term
| Which factor describes a family farmer under Chapter 12 of the Bankruptcy Code? |
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Definition
| Gross income is at least 50% farm dependent, and debt is at least 50% farm related |
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