Multiple choice

1. Passenger entered a subway car at the 42nd Street station. Since all of the seats were occupied, Passenger stood in the subway car and grabbed a pole to secure his balance. As the subway car was proceeding cross-town, Passenger glanced at a voloptuous blonde girl standing next to him. Suddenly, the subway car made an unexpected stop. Rider momentarily lost his balance, and grabbed the blonde girl around the waist (to avoid falling). Once Passenger regained his balance, he removed his hands from the girl’s waist and grasped the pole again.

In a civil action instituted by the blonde girl against Passenger, he will most likely be found

A. liable for battery

B. liable, if Rider mistakenly believed that the girl consented to the contact

C. not liable, since Rider’s conduct was socially acceptable under the circumstances

D. not liable, since the girl was not harmed by the contact

 

2. While relaxing poolside one Sunday afternoon, Dickie was struck by a golf ball driven by Marty, a 14-year-old boy, who was playing the 9th hole at the Pike Creek Golf Club. The fairway for the 9th hole was 65 feet wide and 437 yards long, with a dog-leg in an easterly direction. Between the fairway and Dickie’s property was a “rough” containing brush and low lying trees. As Marty was approaching the green, he hit a towering shot which deflected off a tree, struck Dickie, bounced off his head and knocked a straw hat off of his girlfriend Patty’s head. Although the ball did not strike Patty herself, she became startled and fell from her beach chair, thus breaking her arm. 

At trial plaintiff offered uncontested evidence that golf balls from the Club’s links regularly traversed onto his property two to three times a day. Which of the following statements is most accurate regarding the liability of the Pike Creek Golf Club/Marty for trespass?

A. Defendants are not liable, since they did not intentionally cause the golf ball(s) to traverse onto the plaintiff’s property.

B. Defendants would remain liable for the unpermitted intrusion of the golf ball(s) onto the plaintiff’s property.

C. Since the plaintiff should have reasonably anticipated that living next to a golf course would result in stray golf balls landing on his property, defendants would not be held liable.

D. Since the golf balls did not substantially interfere with the plaintiff’s use and enjoyment of his land, defendants would not be held liable.

 

3. Which of the following would be Dickie’s proper cause of action against Marty as a result of the golf ball hitting his head?

A. Assault but not battery

B. Battery but not assault

C. Assault and battery

D. Neither assault nor battery, since Marty did not intentionally cause Dickie to be struck

 

4. If Patty initiates a suit against Marty to recover damages for her broken arm, Patty will

A. recover for assault only

B. recover for battery only

C. recover for assault and battery

D. not recover

 

Multiple choice

1) The use of budgeted service department cost rates protects using departments from _____. 

A. all of these answers are correct 

B. service outages 

C. price fluctuations 

D. service department efficiencies 

 

2) Cost allocation base refers to the _____. 

A. cost objectives 

B. total allocated costs 

C. total costs to be allocated 

D. cost driver

 

 3) Murphy Company has two service departments, Maintenance and Personnel, as well as two production departments, Mixing and Finishing. Maintenance costs are allocated based on square footage while personnel costs are allocated based on number of employees. The following information has been gathered for the current year: Maintenance Personnel Mixing Finishing Direct dept. costs $126,000 $84,000 $105,000 $175,000 Square footage 800 400 1,600 1,200 Number of employees 8 12 24 32 If the step-down method of allocating costs is used and the Personnel Department is allocated first, then the amount of overhead that would be allocated from Personnel to Mixing is _____. 

A. $78,000 

B. $63,000 

C. $58,500 

D. $31,500 

 

4) Kevin Company has two service departments, Maintenance and Personnel, as well as two production departments, Mixing and Finishing. Maintenance costs are allocated based on square footage while personnel costs are allocated based on number of employees. The following information has been gathered for the current year: Maintenance Personnel Mixing Finishing Direct dept. costs $126,000 $84,000 $105,000 $175,000 Square footage 800 400 1,600 1,200 Number of employees 8 12 24 32 If the step-down method of allocating costs is used and the Personnel Department is allocated first, then the amount of overhead that would be allocated from Personnel to Finishing is _____. 

A. $105,000 

B. $31,500 

C. $72,000 

D. $42,000

 

Multiple choice

1. Carrie owed Charlotte $20,000. Carrie offered Charlotte a promissory note (a negotiable instrument) worth $200,000 upon maturity, which occurred in six months, as payment for the debt. Carrie had actually stolen the promissory note from her friend Samantha. Charlotte probably won’t qualify as a holder in due course because 

A. Charlotte didn’t give value for the instrument. 

B. Charlotte didn’t take the instrument in good faith. 

C. Charlotte should have known the instrument was stolen. 

D. the instrument was stolen from Samantha. 

 

2. Ella owed Mark $500. Since Ella didn’t have the money to pay Mark, she asked Mark if he would accept a negotiable instrument, such as a promissory note, as payment for the debt. Mark indicated he would accept a negotiable instrument as payment. Ella wrote out a promissory note in which she agreed to pay Mark $550 in 60 days if she failed to pay him the $500 in cash within the next 30 days. Ella’s promissory note isn’t negotiable because negotiable instrument must 

A. be payable at a definite time. 

B. state a fixed amount of money. 

C. be payable to order or to bearer. 

D. give an unconditional promise or order to pay. 

 

3. Don purchased a boat from Randy. Randy told Don that he owned the boat free and clear of all liens, which Randy knew to be false, because he had just put the boat up as collateral on a loan at the bank two weeks earlier. Don issued Randy a negotiable promissory note for $5,000 to pay for the boat. By the time the promissory note came due, the bank had repossessed the boat, making Don aware of Randy’s deception. Don will be able to avoid payment to Randy because there was 

A. a failure of consideration. 

B. a breach of contract. 

C. some sort of illegality.

D. fraud in the inducement 

 

4. Joey makes a deposit at Hometown Bank in the amount of $500. Joey’s deposit consist of a 4500 check written to him by Ross, who banks with Crosstown Bank. Hometown Bank deposits the check with Friend’s Bank, which in turn sends the check to Crosstown Bank. Which of the following is true about this set of facts? 

A. Hometown Bank is the payor bank. 

B. Crosstown Bank is the payor bank. 

C. Hometown Bank is an intermediary bank. 

D. Crosstown Bank is the depository bank. 

 

Multiple choice

1. Liza borrows money from First Finance Company for miscellaneous expenses. Liza and First Finance agree that Liza’s diamond ring shall serve as collateral for the loan. Two weeks later, Liza takes a loan from Second Finance Company listing the same diamond ring as collateral. Neither First Finance nor Second Finance takes any additional steps. Liza defaults on both loans. Second Finance demands possession of the diamond ring and Liza gives it to them. Which of the following statements regarding this set of facts is

true?

A. Both First Finance and Second Finance possess equal rights in the diamond ring and must equally divide any proceeds from the sale of the ring.

B. First Finance Company possesses the priority claim because it loaned the money to Liza before Second Finance.

C. Neither finance company possesses a valid security interest in the diamond ring, and neither possesses any remedy due to the failure to file a financing statement.

D. Second Finance Company possesses the priority claim because it perfected its security interest first.

 

2. What type of life insurance would most likely be used to cover the outstanding balance of a home

mortgage?

A. Universal life

End of exam

B. Straight life

C. Endowment

D. Decreasing term insurance

 

3. Victor applies for life insurance. On the application, when asked if he had ever been diagnosed with

cancer, he falsely said no. Later Victor died, and the insurance company found out about the previous

diagnosis of cancer and refused to pay. What were the most likely grounds?

A. Failure to pay premiums

B. Estoppel

C. Misrepresentation

D. Concealment

 

4. Tom is a consumer with a lot of credit card debt who wants to get a clean start and get rid of all of his

debts. If he qualifies, the best chapter in bankruptcy for Tom is Chapter

A. 7.

B. 13.

C. 11.

D. 12.

 

Multiple choice

1. The Uniform Contribution Among Tortfeasors Act, section 4 in the assigned reading for Module 10 provides that

A a release of one tortfeasor is a release of all tortfeasors who are jointly and severally liable.

B a covenant not to sue is the only means by which a plaintiff can settle with one tortfeasor and still maintain suits against the remaining tortfeasors.

C a release of one tortfeasor does not discharge any of the remaining tortfeasors, unless the terms of the release expressly provide for discharge of those remaining tortfeasors.

D A & B.

 

2. In the case of Summers v. Tice, 199 P.2d 1 (Cal. 1948) in the assigned reading for Module 10, the court held that

A since plaintiff could not prove which defendant fired the shot that entered plaintiff’s eye causing harm, plaintiff cannot recover from either defendant.

B if plaintiff can prove that it is at least 51% likely that the shot was fired by one of the defendants, then plaintiff can recover the entire amount of damages from that defendant.

C the burden of proof regarding causation is shifted to the defendants to prove that they were not the cause of plaintiff’s injury.

D none of the above.

 

3. Which case held that where the tortious acts of two or more tortfeasors join together to produce an indivisible injury, all of the wrongdoers will be held jointly and severally liable for the entire damages and plaintiff can proceed against any one tortfeasor separately or against all of them in one suit?

A Landers v. East Texas Salt Water Disposal Co., 248 S.W.2d 73 (Tex. 1952).

B Anderson v. Minneapolis, St. Paul & Sault Ste. Marie Railway, 179 N.W. 45 (Minn. 1920).

C Salinetro v. Nystro, 341 So. 2d 1059 ( Fla. Dist. Ct. App. 1977).

D Joshi v. Providence Health Sys. Of Oregon Corp., 149 P.3d 1164 (Or. 2006).

 

4. Which case, held that the technical legal injury concept (which permits recovery of nominal damages) does not apply to negligence actions?

A Hale v. Ostrow, 166 S.W.3d 71 (Tenn. 2005).

B Right v. Breen, 890 A.2d 1287 (Conn. 2006).

C Viner v. Sweet, 70 P.3d 1046 (Cal. 2003).

D Jordan v. Jordan, 257 S.E.2d 761 (Va. 1979).

 

Multiple choice

1. At one point in time, the company Gator-Aide commanded 83% of the sports beverage market. This market share was primarily due to the fact that a University of Florida professor had invented the product which became very popular and thus the company became very successful. However, there were two other competitors in the market – Coke and Pepsi, which approximately shared the rests of the market. Pursuant to Section 2 of the Sherman Act, the best conclusion regarding anti-trust liability for Gator-Aide would be:

The company would be deemed guilty of monopolization of commerce since it possessed a very high share of the market.

The company would not be deemed guilty of monopolization of commerce.

The company would not be liable since the courts would say that the market was too narrowly defined and should include other sports drinks, such as water, soda, and beer (but only light beer).

The company committed a horizontal restraint of trade by “freezing out” its main competitors.

 

2.Dan assigns to Evan a contract to buy a used car from Fran. To be valid, the assignment must

be in writing and be signed to Dan.

be supported by adequate consideration from Evan.

not be revocable by Dan.

not materially increase Fran’s risk or duty.

 

3. Digital Products Company agrees to sell to Eagle Manufacturing, Inc., a customized software system. If Eagle materially breaches the contract, the remedies available to Digital include the right

to cancel the contract only.

to recover damages only.

to cancel the contract and recover damages.

none of the above.

 

4. Shaquille is hired as a clerk in a “check-cashing store.” He receives a notice in the mail to attend “jury duty.” His boss tells him that he MUST work and can NOT attend jury duty because he is needed at work. Nonetheless, Shaquille goes to jury duty and is picked as a juror. Eventually, after a five day trial, he returns to work. His boss then fires him for being absent even though Shaquille called each day to inform his boss that he was on jury duty. When Shaquille informs his boss that he intends to sue him for “wrongful discharge,” the boss laughs and tells Shaquille that he cannot sue because he is only an employee at-will. Which of the following is the most accurate statement?

a. The boss is right since an employee at-will can be fired for virtually anything.

b. The boss is right since everyone who is absent from work can be fired.

c. The boss is wrong since there was an implied contract that Shaquille could remain at his job for a reasonable amount of time.

d. The boss is wrong because being fired under these circumstances is likely a violation of the Public Policy doctrine.

 

Multiple choice

1. Merchandise inventory: 

A) is a long-term asset. 

B)is a current asset. 

C) includes supplies. 

D) is classified with investments on the balance sheet. 

E) Must be sold within one month. 

 

2. The credit terms 2/10, n/30 are interpreted as: 

A) 2% cash discount if the amount is paid within 10 days, with the balance due in 30 days. 

B) 10% cash discount if the amount is paid within 2 days, with the balance due in 30 days. 

C) 30% discount if paid within 2 days. 

D) 30% discount if paid within 10 days. 

E) 2% discount if paid within 30 days. 

 

3. On October 1, Robinson Company sold merchandise in the amount of $5,800 to Rosser, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Robinson uses the perpetual inventory system. The journal entry or entries that Robinson will make on October 1 is: 

A)Sales…………………………5,800 

       Sales receivable ………….       5,800 

B)Sales…………………………5,800 

       Accounts Receivable………..       5,800 

Cost of goods sold……………..4,000 

       Merchandise inventory………       4,000 

C)Accounts Receivable…………….5,800 

       Sales…………………….       5,800 

D)Accounts Receivable…………….5,800 

       Sales…………………….       5,800 

Cost of Good Sold………………4,000 

       Merchandise Inventory………       4,000 

E)Accounts Receivable…………….4,000 

       Sales…………………….       4,000 

 

4. On October 1, Whaley Company sold merchandise in the amount of $5,800 to Lee Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Whaley uses the perpetual inventory system. Lee pays the invoice on October 8, and takes the appropriate discount. The journal entry that Whaley makes on October 8 is: 

A)Cash………………………….5,800 

      Accounts Receivable…………       5,800 

B)Cash………………………….4,000 

      Accounts Receivable…………       4,000 

C)Cash………………………….3,920 

Sales Discount…………………   80 

      Accounts Receivable…………       4,000 

D)Cash………………………….5,684 

      Accounts Receivable…………       5,684 

E)Cash………………………….5,684 

Sales Discount………………… 116 

      Accounts Receivable…………       5,800 

 

Multiple choice

1. You write a newspaper story about a local hobbyist. You take a dislike to the man and in your article, throw in the assertion that he molested neighborhood children. You won’t be liable for defamation if

A. the plaintiff consented to you writing a story about his hobby.

B. the plaintiff is a public figure.

C. what you said is true.

D. only one other person besides the plaintiff saw your statement.

 

2. The defendant walked up to the plaintiff, a stranger, and quietly demanded her money. No weapon was used. However, the plaintiff felt intimidated and handed over her purse. After this episode she suffered nightmares for several weeks and required a sleeping pill prescription.

A. The plaintiff has a case for conversion and appropriation.

B. The plaintiff has a case for conversion and intentional infliction of emotional distress.

C. The plaintiff has a case for conversion but not intentional infliction of emotional distress. Among other reasons, the facts don’t suggest intent or outrageous or extreme behavior by the defendant.

D. The plaintiff has a case for battery and conversion.

 

3. You’re sitting in your easy chair reading a magazine by the light of your picture window. You look up in time to see a boy throw a rock at the window. Instinctively you duck. The rock shatters the window, hitting you before falling to the floor. The boy takes off running, but the police pick him up later. What are the most torts you could reasonably claim the boy committed?

A. Assault.

B. Assault and battery.

C. Assault and battery and conversion.

D. Assault and battery and conversion and trespass.

 

4. A Massachusetts business has the name The Coffee & Tea House. Will the state allow someone to use The Coffee House Cafe as a name for their business also to operate in Massachusetts?

A. It depends. The state will have to determine whether or not the two names are XXXXX XXXXX

B. Yes, because the names aren’t identical.

C. If the Coffee House is a foreign corporation, the state has absolutely no control over them of any kind.

D. Yes, if the businesses are organized as different types of entities. 

 

Multiple choice

1. Carrie owed Charlotte $20,000. Carrie offered Charlotte a promissory note (a negotiable instrument) worth $200,000 upon maturity, which occurred in six months, as payment for the debt. Carrie had actually stolen the promissory note from her friend Samantha. Charlotte probably won’t qualify as a holder in due course because 

A. Charlotte didn’t give value for the instrument. 

B. Charlotte didn’t take the instrument in good faith. 

C. Charlotte should have known the instrument was stolen. 

D. the instrument was stolen from Samantha. 

 

2. Ella owed Mark $500. Since Ella didn’t have the money to pay Mark, she asked Mark if he would accept a negotiable instrument, such as a promissory note, as payment for the debt. Mark indicated he would accept a negotiable instrument as payment. Ella wrote out a promissory note in which she agreed to pay Mark $550 in 60 days if she failed to pay him the $500 in cash within the next 30 days. Ella’s promissory note isn’t negotiable because negotiable instrument must 

A. be payable at a definite time. 

B. state a fixed amount of money. 

C. be payable to order or to bearer. 

D. give an unconditional promise or order to pay. 

 

3. Don purchased a boat from Randy. Randy told Don that he owned the boat free and clear of all liens, which Randy knew to be false, because he had just put the boat up as collateral on a loan at the bank two weeks earlier. Don issued Randy a negotiable promissory note for $5,000 to pay for the boat. By the time the promissory note came due, the bank had repossessed the boat, making Don aware of Randy’s deception. Don will be able to avoid payment to Randy because there was 

A. a failure of consideration. 

B. a breach of contract. 

C. some sort of illegality. 

D. fraud in the inducement 

 

4. Joey makes a deposit at Hometown Bank in the amount of $500. Joey’s deposit consist of a 4500 check written to him by Ross, who banks with Crosstown Bank. Hometown Bank deposits the check with Friend’s Bank, which in turn sends the check to Crosstown Bank. Which of the following is true about this set of facts? 

A. Hometown Bank is the payor bank. 

B. Crosstown Bank is the payor bank. 

C. Hometown Bank is an intermediary bank. 

D. Crosstown Bank is the depository bank.  

 

Multiple choice

1. Eagle Manufacturing, Inc., contracted with Digital Repair Services to maintain Eagle’s computers. A “Liquidated Damages Clause” provides that Digital will pay Eagle $500 for each day that Digital is late in responding to a service request. If Digital is three days late in responding, and Eagle sues to enforce this clause, Eagle will

A) lose, because liquidated damages clauses violate public policy.

B) lose, unless the liquidated damages clause is determined to be a penalty.

C) win, because liquidated damages clauses are always enforceable.

D) win, unless the liquidated damages clause is determined to be a penalty.

 

2. Fast Ed, a stock trader, engages in a “pump and dump” scheme whereby he goes into Internet chat stock rooms and “hypes,” praises, and extols certain stocks he owns. He says such things as: “This is the best stock ever.” “This stock is great and will make us a fortune.” “You MUST own this stock in your portfolio.” He does repeatedly and uses several aliases. Then, when Fast Ed has “pumped up” the price of the stock to a certain level, he calls his broker to sell, that is, to “dump,” the stock. He makes a lot of money with this scheme. Fast Ed is likely acting:

A) Illegally pursuant to the common law tort of deceit since he did not disclose the aliases.

B) Illegally pursuant to the Securities Act of 1934 for engaging in stock manipulation.

C) Legally since he was careful not to make any misrepresentations of material fact regarding the stock, and just used “puffing” or sales talk.

D) Legally since everyone knows not to put any credence behind what people say in chat rooms, especially about stocks, and thus “Let the buyer beware.”

 

3. Stan buys a CD player from Tom, his neighbor, who agrees to keep the player until Stan picks it up. Before Stan can get it, the player is stolen. The loss is suffered by

A) Stan only.

B) Tom only.

C) Stan and Tom.

D) none of the above.

 

4. General Construction contracts to build a store for Home Stores for $1 million. In mid-project, Home repudiates the contract, and General stops working. General incurred costs of $600,000 and would have made a profit of $100,000. General’s measure of damages likely is

A) $1 million.

B) $700,000.

C) $100,000.

D) nothing.