Question 2

The courts holding in Featured Case 29.1, Ellis v. BlueSky Charter School, shows
that the employment-at-will doctrine is little used today.
False
Question 3
Ken works for Local Excavation Corporation (LEC). While operating a backhoe, Ken
suffers an injury. Ken will be compensated under state workers compensation laws
only if
Kens injury was accidental and occurred on the job or in the course of
employment.
Question 4
After every strike, a striker has a right to return to his or her job.
False
Question 5
The Chip Makers Union would like Digital, Inc. to require union membership of its job
applicants as a condition to obtaining employment. This is
illegal in all states.
Question 6
The United Automobile Workers union is attempting to organize the Vance, Alabama
Mercedes plant. The UAW wishes to have access to the plant cafeteria and
employee lounge areas, in order to talk about the advantages of a union. It would
be legal for Mercedes to deny such access even though it allowed charities to solicit
in such areas.
False
Question 7
Wilma is a salesperson for a pharmaceutical company who spends long hours in
doctors offices waiting to chat about her employers products with the doctors and
their nurses, and arranging for coffee and doughnuts to be delivered to the office
staffs. She works well more than 8 hours per day and well more than 40 hours per
week and wants to be paid overtime. Based on the court s decision in Case
Example 29.4, Smith v. Johnson and Johnson, Wilma should be paid overtime
because she works more than 8 hours per day.
False
Question 8
An exempt employee for purposes of the wage and hour laws is one who is

not covered by the requirements for overtime pay under the Fair Labor
Standards Act.

Question 9
Vera was fired from her job at age 64 because, according to her employer, she was
incompetent. Vera sued under the Age Discrimination in Employment Act because
at the time of her dismissal she says that her boss told her that she was "too old to
get the job done." Under the courts reasoning in Case 30.2, Mora v. Jackson
Memorial Foundation, Veras employer will automatically win (and her case will be
thrown out before trial) because her employer had a good reason to fire Vera.
False
Question 10
Leif is seventy years old and Mira is gay. Based on this information, members of
protected classes include
Leif only.
Question 11
A victim of alleged discrimination must bring a suit against an employer before filing
a claim with the Equal Employment Opportunity Commission.
False
Question 12
Under the Lily Ledbetter Fair Pay Act, an employee who believes that she has been
the victim of illegal discrimination in pay must file her lawsuit within 180 days after
the date of the first paycheck after she becomes aware of the discrimination.
False
Question 13
An employer can be liable for an employees online harassment that creates a
hostile working environment.
True
Question 14
Under the Civil Rights Act of 1964 discrimination in employment is prohibited on the
basis of all except:
Education.

Question 15
It is illegal to refuse to hire someone based on the fact that the individual is the
parent of a disabled child.
True
Question 16
Kay is a salesperson for Liberty Financial Corporation. Mac is also a Liberty
salesperson. Neil is Kay and Macs supervisor. Owen is a Liberty customer. Liberty
may be liable for sexual harassment to Kay by
Mac, Neil, or Owen.
Question 17
An individual can no longer file a private nuisance suit against a firm that pollutes
the environment, because specific laws have preempted such suits.
False
Question 18
In evaluating the appropriate civil or criminal penalty for an environmental law
violation, the courts and the Environmental Protection Agency generally do not
consider whether the violator self-reported the violation.
False
Question 19
An environmental impact statement is required only for projects that will be owned
and operated by the federal government.
False
Question 20
The operations of Metal Industries, Inc. are major sources of air pollution. These
operations must use
the maximum achievable control technology.
Question 21
Power plants are required to eliminate all air polluting emissions.
False
Question 22

Regional Construction Company has a right to drive its trucks across Standard
Business Corporations property, which is adjacent to Regionals office. This right is
an easement.

Question 23
The government can take private property for a public use over the objections of
the property owner so long as just compensation is paid.
True
Question 24
Adverse possession is a means of obtaining title to property without the delivery of
a deed.
True
Question 25
Gene and Sara Jane live on property adjoining a railroad line. The town where Gene
and Sara Jane lived condemned part of their property in order to allow the railroad
company add a parallel track to the line. The railroad company actually had no
concrete plans to expand the railroad line, and the line did not stop in Gene and
Sara Jane's town. If Gene and Sara Jane sued the town to challenge the legality of
the condemnation, they would win this case if the court followed Case 43.2, Town of
Midland v. Morris.
False
Question 26
Which of the following deeds gives the grantee the most amount of protection?
Warranty deed
Question 27
Jim and Lettie agreed to purchase a home under a purchase contract that did not
have any special language about fixtures. When they inspected the home prior to
the closing they discovered that the kitchen cabinets had been removed by the
seller, with nothing put in their place. If Jim and Lettie sue the sellers for damages
caused by the removal of the cabinets, the most likely result will be:
They will be awarded damages because kitchen cabinets are fixtures and
therefore are included in the sale of land if the sales contract does not
provide otherwise.
Question 29
Buddy wanted to sell his t-shirts with NFL logos to the Atlanta Falcons. The team
told Buddy that the National Football League had negotiated an exclusive t-shirt

arrangement with one of Buddys competitors and that, therefore, it could not deal
with Buddy. Buddy knew that he could provide the same quality t-shirts to the
Falcons as the competitor, and at a lower price. Buddy heard that refusals to deal
like this violated the Sherman Antitrust Act. Based on the courts holding in Case
Example 39.1, American Needle, Inc. v. National Football League, Buddy would
automatically lose a lawsuit brought under the Sherman Act, because the National
Football League as an exemption from the federal antitrust laws.
False
Question 30
A suit is filed against Maxi Corporation, alleging that the firm committed the offense
of monopolization. To determine whether Maxi has monopoly power requires looking
at
the relevant geographical market and the relevant product market.
Question 31
On its own, Jerry's Software, LLC develops a superior search engine that surpasses
even Google's in functionality. Within a few years, Jerry's has 75% of the internet
search engine market, even though Jerry's charges a fee to download the software.
People are regularly talking about searching for information by "Jerrying" it.
Eventually, Jerry's starts acting in a noncompetitive manner including by raising the
price for the search engine software higher and higher. The best choice for a lawsuit
challenging Jerry's actions would be Section 1 of the Sherman Act.
False
Question 32
The basic purpose of antitrust law is to promote competition.
True
Question 33
Skip to question text.
Big Corp. and Mega Co. are the two primary competitors for selling exercise
equipment in the United States. The two companies were created by two brothers
who years ago came to an unstated agreement that for purposes of the "lower 48
states" one would sell only on the east side of the Mississippi River and the other
would sell only on the west side of the river. The brothers are long-deceased and no
one has ever found or entered into an agreement memorializing this arrangement.
However, the arrangement is in fact in effect. Big and Mega cannot be prosecuted
under Section 1 of the Sherman Act because only express agreements can be the
subject of that law.
False
Question 34

Richard has three children, Annie, Betty and Carrie. Annie and Betty each have two
children. Carrie has one child. If Richard used the per stirpes method of passing his
assets to these five grandchildren in his will, Carries child would receive
one-third of Richards assets
Question 35
Dhani is the beneficiary of a life insurance policy on Elmos life obtained from Famed
Insurance Company. The insured under this policy is
Elmo.
Question 36
When Beulah died, she left a signed will in her safe deposit box that had several
paragraphs crossed out and initialed by Beulah along with the initials of witnesses
to her doing so. Under the reasoning of the court in Featured Case 44.3, Peterson v.
Harrell, Beulahs act of crossing out portions of the will served to revoke the entire
will.
False
Question 37
Speedy Shipping Corporation applies to TransInsurance Company for a fire
insurance policy on Speedys warehouse. On the application, Speedy misrepresents
the age of the property to obtain a lower premium. When a fire soon destroys the
warehouse, TransInsurance can
deny payment, because of Speedys fraud in the application.
Question 38
Kendall executes a separate written instrument to amend her prior will. This
separate document is
a codicil.
Question 39
Isabel obtains a fire insurance policy on her home from Justice Insurance Company.
The home is lost in a fire, but the parties dispute the amount of Justices liability
under an ambiguous clause in the policy. A court would most likely
interpret the clause against Justice.
Question 40
To assist in detecting illegal bribes, Cut Rite Contractors, Inc., and all U.S.
companies, must
keep records that accurately and fairly reflect financial activities.
Question 41

Which of the following is NOT a correct restatement of the principle that the law is a
"moral minimum."
Obeying the law is what a person should do in order to be a good citizen.
Question 42
Chinese business people have a very casual approach to exchanging business
cards, compared to Americans.
False
Question 43
Bobbie and Robbie, LLC, a public accounting firm, failed to detect that its client
Libbett and Hibbett, Inc.had concealed some material liabilities in its financial
statements that had been audited by Bobbie and Robbie. The financial statements
were filed as part of Libbett and Hibbett's 1934 Act filings. Bobbie and Robbie
learned that its client was going to use those financial statements to raise funds
from investors, but did not withdraw its opinion on the financial statements. Based
on Case 41.2, Overton v. Todman & Co., CPAs,
Bobbie and Robbie would be liable under the 1934 Act because it had a
duty to correct its opinion.
Question 44
Tiny is an accountant. Tinys violation of generally accepted accounting principles
and generally accepted auditing standards
is prima facie evidence that Tiny was negligent.
Question 45
Which of the following would NOT be considered an act discreditable by an
accountant under Rule 501 of the AICPA Rules of Professional Conduct:
Getting divorced for the seventh time
Question 46
In preparing a clients current-year individual income tax return, a tax practitioner
discovers an error in the prior years return. Under the rules of practice of the IRS,
the tax practitioner:
Must advise the client of the error.
Question 47
According to the professions ethical standards, an auditor is considered
independent in which of the following situations:
The auditors checking account, which is fully insured by the FDIC, is held
at a client bank

Question 48
Hadley and Ilene are accountants who work together. Hadley and Ilene can limit
their potential liability for each others misconduct by organizing their business as
a limited liability partnership.
Question 49
Bryces accountant is Caleb and his attorney is Delilah. All states protect from being
entered as evidence in a court proceeding, as privileged information, Bryces
communications with
Delilah only.
Question 50
Jonelle purchased securities in Big Box Corporation (BBC) which declined in value
after BBC announced weak quarterly earnings. Arch & Bald certified the financial
statements in BBCs Form 10-Q filing in which the weak earnings were disclosed, as
well as the Forms 10-Q and 10-K of BBC for the previous ten years. Jonelle sues Arch
& Bald for fraud under the appropriate section of the federal securities laws relating
to fraud in connection with their role in the Forms 10-Q and 10-K. In her deposition
in the case, Jonelle admits that she never had actually read any of BBCs SEC filings,
but instead had acted on a tip from a friend in buying BBC stock. True or false, this
ailure on Jonelles part is irrelevant.
False
Question 51
Rob's Luau Gardens Inc. (RLGI) bought a building in Year 1 for $190,000. At that
time, RLGI purchased a $180,000 fire insurance policy from Partial States Insurance
Co. The policy contained a standard 80% co-insurance clause. In Year 5, when the
building had a fair market value of $300,000, it was damaged in a fire. How much
would RLGI recover from Partial States if the fire caused $20,000 in damages and
the original policy were still in effect?Insur
$20,000