Business Law for accountants Exam 1 Answer the questions for LAW For Accountants. just true or false.the questions on the file. BUSINESS LAW FOR ACCOUNTANT

Business Law for accountants Exam 1 Answer the questions for LAW For Accountants. just true or false.the questions on the file. BUSINESS LAW FOR ACCOUNTANTS
Study Guide for Examination 1
Directions: Please read each question carefully, then indicate your response on
the answer sheet provided. PLEASE BE SURE TO READ THE ENTIRE QUESTION
CAREFULLY. Please do not write on the examination.
True/False:
1.
Title and risk of loss may pass to the buyer from the seller before the goods are
identified.
2.
Identification takes place when specific goods are designated as the subject matter
of a sales contract.
3.
Under Article 2 of the UCC, absent an agreement to the contrary, all contracts are
presumed to be shipment contracts.
4.
Where a seller keeps the goods for pickup, if the seller is not a merchant, the risk
of loss passes to a buyer upon tender of delivery.
5.
When a buyer breaches a contract, the risk of loss remains with the seller.
6.
In a shipment contract, the risk of loss passes to the buyer when the goods are
delivered to the carrier.
7.
A breach of contract entitled the nonbreaching party to file a lawsuit against the
breaching party for monetary damages.
8.
A shipment contract requires a seller to deliver goods at a particular destination.
9.
Once the time for performance under a contract has expired, the seller loses the
right to cure.
10.
Under Article 2 of the UCC, absent an agreement to the contrary, the buyer has
an absolute right to inspect the goods before making payment.
11.
Under Article 2 of the UCC, a seller may accept a buyer’s offer to purchase goods
by either promptly shipping conforming goods, or by promising to promptly
ship conforming goods.
12.
A destination contract requires the seller to ship goods by a carrier, but does not
require delivery of goods at a particular destination.
13.
The term “cure” refers to the right of the seller to repair or replace defective or
nonconforming goods prior to the time of performance.
14.
Under Article 2 of the UCC, absent an agreement to the contrary, the buyer is
required to pay for the goods before they are received.
15.
Under Article 2 of the UCC, acceptance of goods occurs when a buyer fails
to reject the goods within a reasonable time.
16.
If a buyer breaches a contract, the seller may cancel the contract, sell the goods
to a substitute buyer, and file a lawsuit against the original buyer for monetary
damages.
17.
When a buyer has breaches a sales contract, and the goods are in the buyer’s
possession, the seller may suspend performance and file a lawsuit against the
buyer to recover the purchase price.
18.
The parties to a sales contract can vary their respective rights and
obligations by express agreement.
19.
The Statute of Frauds requires that fraud must be proved by a writing.
20.
Under the Statute of Frauds, all contracts must be in writing to be enforceable.
21.
A contract for a sale of goods priced at $499.99 is not governed by Article 2 of the
U.C.C.
22.
Anticipatory repudiation constitutes breach of a contract.
23.
Contracts involving the sale of real estate are governed by Article 2 of the Uniform
Commercial Code.
24.
Contracts involving the sale of real estate must be in writing to be enforceable.
25.
The sale of stocks and bonds is governed by Article 2 of the Uniform
Commercial Code.
26.
Under Article 2 of the UCC, a “merchant” is a person who deals in goods of the
kind involved in the contract.
27.
Under Article 2 of the UCC, a contract is valid and enforceable if the contract fails
to state a price, fails to state payment terms, and fails to state delivery terms,
provided that the parties intended to make a contract, and there is a basis for the
court to grant a remedy.
28.
A merchant’s firm offer may be revoked at any time prior to its acceptance.
29.
In a requirements contract, the seller agrees to sell, and the buyer agrees to buy,
all of what the seller produces.
30.
The “mirror image rule” requires that the terms of the acceptance exactly match
the terms of the offer.
31.
Under Article 2 of the UCC, a contract is void and unenforceable if the acceptance
includes terms additional to, or different from, the terms contained in the offer.
32.
Under both common law and Article 2 of the UCC, contractual modifications
require consideration to be binding.
33.
Under Article 2 of the UCC, an oral contract for the sale of specially manufactured
good valued at $1,000.00 is enforceable.
34.
Identification gives the buyer an insurable interest in the goods.
35.
In shipment contracts, absent an agreement to the contrary, title passes to the
buyer when the seller delivers the goods to the carrier.
36.
Under Article 2 of the UCC, absent an agreement to the contrary, all contracts are
presumed to be destination contracts.
37.
In shipment contracts, absent an agreement to the contrary, the risk of loss passes
to the buyer when the seller delivers the goods to the buyer.
38.
Under Article 2 of the UCC absent an agreement to the contrary, in destination
contracts, the risk of loss passes to the buyer when the seller delivers the goods
to the carrier.
39.
Where goods are held by the seller, and the seller is not a merchant, risk of loss
passes to the buyer when the seller tenders delivery.
40.
In “sale on approval” contracts, title and risk of loss remain with the seller until the
buyer accepts the offer.
41.
In “sale on approval” contracts, acceptance occurs only when the buyer expressly
accepts the goods, fails to return the goods during the trial period, or does any act
inconsistent with the trial purpose, such as selling the goods to a third person.
42.
In “sale or return” contracts, even though the sale is complete, the buyer has the
right to return the goods and undo the sale.
43.
“Sale on approval” contracts and “sale or return” contracts both constitute
conditional sales contracts.
44.
A buyer acquires an insurable interest in goods once the goods are identified.
45.
A seller has an insurable interest in goods as long as the seller has title to the
goods.
46.
A seller and a buyer may not both have an insurable interest in identical goods at
the same time.
47.
Under Article 2 of the UCC, merchants are held to the same standard of
performance as nonmerchants.
48.
Under Article 2 of the UCC, “good faith” means that contractual obligations must
be fair.
49.
The basic obligation of the seller in a sales contract is to transfer and deliver
conforming goods.
50.
The basic obligation of the buyer in a sales contract is to accept and pay for
conforming goods.
51.
Under Article 2 of the UCC, “tender of delivery” occurs when the seller makes
conforming goods available and gives the buyer reasonable notice.
52.
Under common law, the “perfect tender rule” requires the seller to deliver goods
that conform to the contract in every detail.
53.
The UCC preserves the “perfect tender rule” if the tender or the delivery fails in
any respect to conform to the contract.
54.
Under Article 2 of the UCC, the seller has the right to cure defective delivery
provided the seller notifies the buyer of her intent to cure, even if the time for
performance has expired.
55.
If goods are destroyed through no fault of either party before risk of loss passes to
the buyer, both the buyer and the seller are excused form performance.
56.
Under Article 2 of the UCC, if a seller has reasonable grounds to believe that the
buyer party will not perform, the seller may make written demand of adequate
assurance of performance upon the buyer.
57.
Under Article 2 of the UCC, if a seller has made written demand of adequate
assurance of performance upon the buyer, the seller may suspend her
performance until the adequate assurance is received.
58.
Under Article 2 of the UCC, absent an agreement to the contrary, the buy is
required to pay for the goods in advance (before they are received).
59.
Under Article 2 of the UCC, absent an agreement to the contrary, an opportunity
to inspect the goods is a condition precedent to the seller’s right to enforce
payment.
60.
Under Article 2 of the UCC, absent an agreement to the contrary, a buyer may
accept goods (even nonconforming goods) expressly by words or actions, or by
failing to reject the goods, or by selling the goods to a third party.
61.
Anticipatory repudiation constitutes a breach of contract.
62.
Under Article 2 of the UCC, in the event of a breach by the buyer, the seller’s
remedies depend upon which party has possession of the goods, whether the
goods are in transit, and whether the buyer has accepted or rejected the goods.
63.
Under Article 2 of the UCC, if the buyer breaches while the goods are in transit,
the seller is not required to notify the buyer if the seller elects to stop delivery.
64.
Under Article 2 of the UCC, if the seller refuses to deliver the goods, the buyer has
the right to “cover” (buy substitute goods from another seller), and file a lawsuit
against the original seller for the difference between the cover price and the
contract price.
65.
Under Article 2 of the UCC, if the seller delivers nonconforming goods, the buyer
has the right to reject the goods, provided that the rejection is made within a
reasonable time, but the buyer is required to state the reasons for rejection.
66.
Under Article 2 of the UCC, if the seller delivers nonconforming goods, and the
buyer fails to reject the goods within a reasonable time, the buyer’s acceptance is
presumed.
67.
Under Article 2 of the UCC, once the buyer has accepted goods, the buyer may
never revoke acceptance, even if the goods are defective.
68.
A mechanic’s lien allows creditors who provide labor, services, or materials to
improve real estate to place a lien on that real estate to secure payment.
69.
A lien is an encumbrance on property to satisfy a debt or protect a claim for
payment of a debt.
70.
Mechanics liens are governed by federal law.
71.
Lienholders generally take priority over other claims against the same property.
72.
In the United States today, if a debtor defaults on a debt, the debtor may be
sentenced to a term of imprisonment for up t0 10 years.
73.
If a creditor obtains a judgment against a debtor, the court may order that the
debtor’s assets be seized and sold to satisfy the judgment.
74.
Garnishment is used in foreclosure proceedings to sell real estate at a public
auction.
75.
A mortgage is a written instrument that gives a lending creditor an interest in, or a
lien upon, the debtor’s real estate as security for payment for the debt.
76.
Foreclosure proceedings are governed by federal law.
77.
Forbearance is a postponement of part or all of the payments on a loan for a limited
time.
78.
As long as a lender substantially complies with a state’s foreclosure statutes, real
estate may be foreclosed upon; strict compliance with foreclosure law is not
required.
79.
Suretyship and guaranty provide debtors with the right to seek payment from a
third party if the debtor defaults on his or her obligations.
80.
A surety can be required to pay an obligation only after the principal debtor
defaults, and usually only after the creditor has made an attempt to collect payment
from the debtor.
81.
Guarantors are primarily liable to creditors.
82.
When a surety or guarantor pays a debt owed to a creditor, the surety of guarantor
acquires any right that the creditor had against the debtor.
83.
Guarantor liability arises only after the debtor defaults.

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