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ETH 321 Week 2 Quiz
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ETH 321 Week 2 Quiz

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1) Which of the following statements is true of states' police power?

A) Police power restricts states from regulating interstate commerce, although it happens within their borders.

B) The states are allowed to regulate army activities within their borders.

C) They are given the authority to enact laws that regulate the conduct of business.

D) The police force of a state is controlled by the federal police department.

 

2) Which of the following statements is true about the arbitration procedure?

A) When one party seeks to enforce an arbitration clause, it must give notice to the other party.

B) In the event of nonbinding arbitration, the decision and award of the arbitrator cannot be appealed to the courts.

C) In the event of binding arbitration, the decision and award of the arbitrator can be appealed to the courts.

D) No new evidence, witness, or testimony can be introduced during the arbitration procedure.

 

3) The first ten amendments to the U.S. Constitution are collectively known as the ________.

A) Due Process Clause

B) Privileges Clause

C) Bill of Rights

D) Articles of Confederation

 

4) The ________ requires that the government give a person proper notice and hearing of legal action before that person is deprived of his or her life, liberty, or property.

A) procedural due process

B) substantive due process

C) Supremacy Clause

D) Equal Protection Clause

 

5) ________ is a general rule of corporate law that provides that generally shareholders are liable only to the extent of their capital contributions for the debts and obligations of their corporation and are not personally liable for the debts and obligations of the corporation.

A) Limited-purpose clause

B) Limited liability of shareholders

C) Preferred shareholder rule

D) Nonparticipating shareholder rule

 

6) Judges for federal courts are selected ________.

A) by election by the voters within the state where they preside

B) by the president, subject to confirmation by the Senate

C) by the U.S. Supreme Court justices

D) by the sitting federal judges within the same circuit

 

7) Which of the following statements is true of the U.S. Supreme Court?

A) The U.S. Supreme Court's decisions are appealable.

B) The U.S. Supreme Court hears appeals only from the federal circuit courts of appeals.

C) The U.S. Supreme Court does not hear any new evidence or testimony in reviewed cases.

D) The U.S. Supreme Court does not grant any oral hearings to the parties.

 

8) Jill wins a lawsuit against Terry in the Wyoming state court. The court passes a judgment for Terry to pay $20,000 to Jill. Immediately after the case is settled, Terry moves to Colorado, where she owns a house, and refuses to pay Jill the money. Which of the following is the best course of action for Jill?

A) file a lawsuit against Terry in a Colorado state court to enforce the Wyoming court judgment

B) file another case against Terry in the Wyoming state court to collect the money against Terry's property

C) file a case against Terry in Wyoming to force Terry to sell her house in Colorado to pay the money

D) file a case in the Colorado federal court as this qualifies as a federal question case

 

9) Which of the following is true of LLC taxation?

A) An LLC is taxed as a corporation in all general cases.

B) An LLC can be taxed only as a partnership.

C) Members of an LLC are subject to double taxation.

D) An LLC is not taxed at the entity level.

 

10) A panel of persons who are elected by the shareholders that make policy decisions concerning the operation of a corporation is known as ________.

A) legal aides

B) cartel

C) consortium

D) board of directors

 

11) Which of the following is a function of the state supreme courts?

A) conducting trials related to misdemeanor criminal law

B) hearing appeals from intermediate appellate state courts and certain trial courts

C) conducting trials related to felonies and civil disputes

D) reviewing the judgments and records of the lower courts and ratifying them

 

 

 

 

 

12) According to priority, which of the following claimants is the last to be paid after assets have been liquidated of a corporation?

A) creditors

B) common stockholders

C) preferred shareholders

D) bond holders

 

13) Which of the following is true about dividends?

A) Cash or property dividends, once declared, can be revoked.

B) Officers of the corporation may opt to retain profits for corporate purposes instead of as dividends.

C) Shareholders can sue to recover undeclared and paid dividends.

D) Dividends are paid at the discretion of the board of directors.

 

14) Which of the following is true of an S corporation?

A) The corporation can have no more than 100 shareholders.

B) Only foreign corporations can be an S corporation.

C) They are taxed at the corporate level.

D) The corporation must be a member of an affiliated group of corporations.

 

15) Which of the following policies helps a corporate officer from being sued for honest mistakes made on behalf of a corporation?

A) duty of loyalty

B) duty of obedience

C) business judgment rule

D) self-dealing

 

16) The Sarbanes-Oxley Act officially applies only to a ________ corporation.

A) close

B) nonprofit

C) public

D) noncommercial

 

17) An LLC differs from a sole proprietorship in that it ________.

A) gives nonmanager members rights to manage a manager-managed LLC's business affairs

B) is less complex and costly to form than a sole proprietorship

C) can be owned by one owner in most states and can thus obtain limited liability

D) requires at least one member who is personally liable for the obligations of the partnership

 

18) Owners of a corporation who elect the board of directors and vote on fundamental changes in the corporation are known as ________.

A) spectators

B) shareholders

C) electors

D) associates

 

19) Which of the following is true of liabilities of LLCs?

A) Members of the LLC are liable to the extent of their capital contribution.

B) Managers of LLCs are personally liable for the debts, obligations, and liabilities of the LLC.

C) LLCs are not liable for any loss or injury caused by their employees.

D) LLCs are not liable for losses caused due to negligence of their managers during the ordinary course of business.

 

20) How are the justices of the U.S. Supreme Court appointed?

A) They are nominated by the President and confirmed by the Senate.

B) They are directly appointed by the President of the United States.

C) They are nominated and confirmed by the Chief Justice of the Supreme Court.

D) They are nominated by the Associate Justices and confirmed by the Chief Justice.

 

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