Business Its Legal Ethical and Global Environment 10th Edition Jennings Test Bank
Business Its Legal Ethical and Global Environment 10th Edition Jennings Test Bank
Business Its Legal Ethical and Global Environment 10th Edition Jennings Test Bank
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Sources of Contract Law
KEYWORDS: Bloom's: Application
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Sources of Contract Law
KEYWORDS: Bloom's: Knowledge
3. Under the UCC, offers need price, subject matter, and quantity to be definite enough.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Offer
KEYWORDS: Bloom's: Knowledge
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Offer
KEYWORDS: Bloom's: Knowledge
5. Revocation can be valid any time prior to acceptance.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Offer
KEYWORDS: Bloom's: Knowledge
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Offer
KEYWORDS: Bloom's: Knowledge
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Offer
KEYWORDS: Bloom's: Knowledge
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Offer
KEYWORDS: Bloom's: Knowledge
9. The UCC Battle of the Forms provision allows additional terms in an acceptance without invalidating the
acceptance.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Offer
KEYWORDS: Bloom's: Knowledge
10. The UCC rules on additional terms in acceptance are the same for merchants and nonmerchants.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Offer
KEYWORDS: Bloom's: Knowledge
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Sources of Contract Law
KEYWORDS: Bloom's: Knowledge
12. An acceptance of a stipulated means offer by a different means is effective upon receipt.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Acceptance: The Offeree's Response
KEYWORDS: Bloom's: Knowledge
13. Common law does not dictate amounts required for consideration.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Sources of Contract Law
KEYWORDS: Bloom's: Knowledge
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Contract Form: When a Record is Required
KEYWORDS: Bloom's: Knowledge
15. A contract for the sale of a car for $700, under the old UCC, must be in writing to be enforceable.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Contract Form: When a Record is Required
KEYWORDS: Bloom's: Knowledge
16. A contract to solicit subscribers through pop-up Internet ads is considered a good under the UCC because it is a list
of names.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Sources of Contract Law
KEYWORDS: Bloom's: Application
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Types of Contracts
KEYWORDS: Bloom's: Knowledge
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Types of Contracts
KEYWORDS: Bloom's: Knowledge
19. A UCC offer is valid with the subject matter stated even though no price is given.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Offer
KEYWORDS: Bloom's: Knowledge
20. "I'll take it, but you must deliver," is a valid acceptance.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Acceptance: The Offeree's Response
KEYWORDS: Bloom's: Application
21. An acceptance by a merchant in response to an offer by a merchant cannot contain any additional terms or it will
be treated as a counteroffer under the UCC.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Offer
KEYWORDS: Bloom's: Comprehension
22. Parol evidence is always admissible for challenging contract terms.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Contract Form: When a Record is Required
KEYWORDS: Bloom's: Comprehension
ANSWER: False
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Offer
KEYWORDS: Bloom's: Application
24. "I'll take the bike for $75, but first I have to sell my fish tank," is an example of a valid acceptance.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Acceptance: The Offeree's Response
KEYWORDS: Bloom's: Application
25. "This offer is limited to these terms," means that between merchants only immaterial terms added in the acceptance
will be part of the contract.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Offer
KEYWORDS: Bloom's: Application
26. The parol evidence rule does not apply in UCC contracts.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Contract Form: When a Record is Required
KEYWORDS: Bloom's: Comprehension
ANSWER: True
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: CISG - UCC for the World
KEYWORDS: Bloom's: Comprehension
28. "Drive my car to Albuquerque, and I'll pay you $500," is not a valid offer.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Offer
KEYWORDS: Bloom's: Application
ANSWER: True
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: CISG - UCC for the World
KEYWORDS: Bloom's: Comprehension
30. Under ESIGN, clicking on a tab that reads “I accept” is a valid acceptance to an offer.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Writing and E-Commerce: The Uniform Electronic Transaction Act
KEYWORDS: Bloom's: Application
ANSWER: False
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Types of Contracts
KEYWORDS: Bloom's: Knowledge
32. The UCC has no timing rules for acceptance.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Acceptance: The Offeree's Response
KEYWORDS: Bloom's: Comprehension
ANSWER: False
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Contract Form: When a Record is Required
KEYWORDS: Bloom's: Knowledge
34. E-Sign requires that there be faxes or written verification of electronic contracts.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Writing and E-Commerce: The Uniform Electronic Transaction Act
KEYWORDS: Bloom's: Knowledge
35. UETA has not yet been adopted in all of the states.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Writing and E-Commerce: The Uniform Electronic Transaction Act
KEYWORDS: Bloom's: Comprehension
36. UETA does not apply when there is an applicable statute of frauds.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Writing and E-Commerce: The Uniform Electronic Transaction Act
KEYWORDS: Bloom's: Comprehension
37. A contract for the sale of potatoes is not governed by the UCC.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Sources of Contract Law
KEYWORDS: Bloom's: Application
38. Under the UCC, an acceptance followed by additional terms is a counteroffer and a rejection.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Acceptance: The Offeree's Response
KEYWORDS: Bloom's: Comprehension
39. A contract for rebinding 500 books at a cost of $1.50/book is governed by the UCC.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Sources of Contract Law
KEYWORDS: Bloom's: Application
40. The above book contract must be in writing to be valid.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Contract Form: When a Record is Required
KEYWORDS: Bloom's: Application
41. A record, such as an e-mail or fax, now satisfies the writing requirement under both the UCC and common law.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Contract Form: When a Record is Required
KEYWORDS: Bloom's: Application
42. Point-and-click is a valid means of forming a contract if the parties had adequate knowledge of the terms and
conditions of the agreement in advance.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Writing and E-Commerce: The Uniform Electronic Transaction Act
KEYWORDS: Bloom's: Application
43. E-Sign is a federal law that requires written signatures for electronic contracts to be valid.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Writing and E-Commerce: The Uniform Electronic Transaction Act
KEYWORDS: Bloom's: Knowledge
44. Under the UCC, a contract for the sale of a car for $700 need not have a record of the contract to be enforceable.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Contract Form: When a Record is Required
KEYWORDS: Bloom's: Application
45. A contract for termite extermination at a home would be governed by the UCC.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Sources of Contract Law
KEYWORDS: Bloom's: Application
46. “Point and click” is not sufficient for acceptance under UETA.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Writing and E-Commerce: The Uniform Electronic Transaction Act
KEYWORDS: Bloom's: Application
47. A three-year warranty on an oven need be evidenced by a record to be enforceable.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Contract Form: When a Record is Required
KEYWORDS: Bloom's: Application
48. A contract for the sale of a $12.2 million Lear jet would be governed by common law because a document of title is
involved.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Sources of Contract Law
KEYWORDS: Bloom's: Application
49. “Would you be interested in selling your Prius for $21,000?”, is not an offer.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Offer
KEYWORDS: Bloom's: Application
50. Which of the following contract subject matters would not be covered under the UCC?
a. a contract for the sale of a mobile home from the manufacturer
b. a contract for the sale of a mobile home from a previous owner
c. a contract for the sale of a mobile home plus its lot
d. All of the above are under the UCC.
ANSWER: c
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Sources of Contract Law
KEYWORDS: Bloom's: Application
51. Which of the following is not required for a valid UCC offer?
a. quantity
b. payment terms
c. subject matter
d. both b and c
e. a, b, and c
ANSWER: b
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Offer
KEYWORDS: Bloom's: Comprehension
ANSWER: e
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Offer
KEYWORDS: Bloom's: Comprehension
53. To be valid, a UCC merchant's firm offer:
a. must be supported by consideration.
b. must be evidenced by a record.
c. must be signed by both parties.
d. all of the above
ANSWER: b
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Offer
KEYWORDS: Bloom's: Comprehension
ANSWER: c
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Offer
KEYWORDS: Bloom's: Comprehension
55. Under the UCC and between nonmerchants, additional terms in acceptance:
a. constitute a counteroffer.
b. are part of the contract.
c. result in rejection or the original offer.
d. none of the above
ANSWER: d
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Acceptance: The Offeree's Response
KEYWORDS: Bloom's: Comprehension
56. Under the UCC and between merchants, additional terms in acceptance:
a. are part of the contract unless they are material.
b. are part of the contract unless the offer was limited.
c. result in rejection of the original offer.
d. none of the above
ANSWER: a
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Acceptance: The Offeree's Response
KEYWORDS: Bloom's: Comprehension
ANSWER: b
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Acceptance: The Offeree's Response
KEYWORDS: Bloom's: Comprehension
ANSWER: b
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Formation of Contracts
KEYWORDS: Bloom's: Comprehension
59. Which of the following contracts would not have to be in writing under the old UCC?
a. a contract for the sale of an easement for $450
b. a contract for consulting services for $10,000 over the next 90 days
c. a three-year advertising contract
d. a contract for the sale of furniture for $700
e. All of the above must be in writing.
ANSWER: b
POINTS: 1
DIFFICULTY: Challenging
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
STATE STANDARDS: United States - OH - AICPA: BB-Critical Thinking
TOPICS: Contract Form: When a Record is Required
KEYWORDS: Bloom's: Application
60. The following series of events occurred between Bull's Meat Market and The Butcher:
May 1 - The Butcher faxes Bull's and offers to buy 200 lbs. of T-bone steak at $3.29 per lb.
May 2 - Bull's faxes back: "Price is okay. Payment prior to delivery."
Bull's and The Butcher:
a. have a contract on May 2 with the payment term.
b. have a contract on May 2 without the payment term.
c. do not have a contract.
d. none of the above
ANSWER: a
POINTS: 1
DIFFICULTY: Challenging
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
STATE STANDARDS: United States - OH - AICPA: BB-Critical Thinking
TOPICS: Acceptance: The Offeree's Response
KEYWORDS: Bloom's: Application
61. Jane Linden is negotiating with James Paul to buy his 1987 Toyota MR5. The following excerpts from letters have
occurred so far:
Jane: "I would be interested in purchasing your MR5."
James: "I am thinking of selling my MR5."
Jane: "I am considering selling my diamond tennis bracelet to buy your MR5."
Which of the following statements is true?
a. James and Jane have a contract to sell the MR5.
b. James and Jane do not have a contract to sell the MR5.
ANSWER: b
POINTS: 1
DIFFICULTY: Challenging
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
STATE STANDARDS: United States - OH - AICPA: BB-Critical Thinking
TOPICS: Formation of Contracts
KEYWORDS: Bloom's: Application
62. John Freeden is negotiating with Bill Murray to buy Bill's mountain bicycle. The following conversation has taken
place:
John: "I will buy your mountain bike for $325.00."
Bill: "I couldn't sell it for less than $375.00."
John: "I'll take it for $375.00."
Which of the following statements is true?
a. Bill and John have a contract for the sale of the bike at $375.00.
b. Bill and John have a contract for the sale of the bike at $325.00.
c. Bill and John do not have a contract.
d. none of the above
ANSWER: c
POINTS: 1
DIFFICULTY: Challenging
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
STATE STANDARDS: United States - OH - AICPA: BB-Critical Thinking
TOPICS: Formation of Contracts
KEYWORDS: Bloom's: Application
63. Jerry Montray is negotiating with Pamela Barnes for the purchase of her mountain bike. The following conversation
has taken place:
Jerry: "I will buy your mountain bike for $375.00."
Pamela: "I will sell it to you."
Jerry: "Good. The tire pump is included."
Which of the following statements is true?
a. Jerry and Pamela have a contract for the bike at $375.00.
b. Jerry and Pamela do not have a contract for the bike at $375.00.
c. Jerry and Pamela have a contract for the bike at $375.00 with the tire pump.
d. none of the above
ANSWER: a
POINTS: 1
DIFFICULTY: Challenging
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
STATE STANDARDS: United States - OH - AICPA: BB-Critical Thinking
TOPICS: Formation of Contracts
KEYWORDS: Bloom's: Application
64. Which of the following is not a risk associated with international contracting?
a. Currency exchange rates
b. Transportation costs
c. Fee collection
d. None of the above
ANSWER: d
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
STATE STANDARDS: United States - OH - AICPA: BB-Critical Thinking
TOPICS: Issues in Formation of International Contracts
KEYWORDS: Bloom's: Application
65. Ann Frazer has just purchased a new Maserati. Ann will be borrowing the money from her bank. Ann signed the
contract at 8:00 PM at the dealership and her bank will not be open until 10:00 AM the following day. Ann:
a. has a contract regardless of whether her bank approves her loan.
b. has made a conditional acceptance and has no contract.
c. will be excused from her contract if the bank does not approve her loan.
d. none of the above
ANSWER: c
POINTS: 1
DIFFICULTY: Challenging
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
STATE STANDARDS: United States - OH - AICPA: BB-Critical Thinking
TOPICS: Formation of Contracts
KEYWORDS: Bloom's: Application
66. The language "I offer to sell you my 1974 White Ford Torino" is:
a. a valid offer.
b. not a valid offer because it lacks a definite price.
c. not a valid offer because there are no terms for payment.
d. not a valid offer because it is oral.
ANSWER: a
POINTS: 1
DIFFICULTY: Challenging
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
STATE STANDARDS: United States - OH - AICPA: BB-Critical Thinking
TOPICS: Offer
KEYWORDS: Bloom's: Application
67. Day 1: Mike sends Tina a letter offer to sell his fish tank to her for $125.
Day 2: Tina faxes Mike an acceptance.
Day 2: Mike receives Tina's fax.
Day 3: Mike calls Tina to revoke his offer.
Mike and Tina:
a. do not have a contract since Tina used the wrong means of acceptance.
b. do not have a contract because Mike revoked his offer before Tina accepted properly.
c. have a contract as of the receipt of the fax.
d. have a contract as of when the fax was sent.
ANSWER: d
POINTS: 1
DIFFICULTY: Challenging
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
STATE STANDARDS: United States - OH - AICPA: BB-Critical Thinking
TOPICS: Formation of Contracts
KEYWORDS: Bloom's: Application
68. Walt's Pool World's fax to Pat's Pumps: "I'll take 10 4 hp pool pumps @ $175 each."
Pat's Pumps' return fax: "Ok. Will deliver tomorrow AM."
Pat and Walt:
a. do not have a contract because the faxes will not satisfy the statute of frauds.
b. do not have a contract because of the mirror image rule.
c. had a contract when Pat's fax was sent.
d. had a contract when Pat's fax was received.
ANSWER: c
POINTS: 1
DIFFICULTY: Challenging
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
STATE STANDARDS: United States - OH - AICPA: BB-Critical Thinking
TOPICS: Formation of Contracts
KEYWORDS: Bloom's: Application
69. Which of the following contract subject matters must be evidenced by a writing to be enforceable under the statute
of frauds?
a. a contract for the sale of an easement for $75
b. a contract for the sale of a computer monitor for $220
c. a contract for consulting for 6 months @ $10,000 per month plus expenses
d. All of the above must be in writing.
ANSWER: a
POINTS: 1
DIFFICULTY: Challenging
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
STATE STANDARDS: United States - OH - AICPA: BB-Critical Thinking
TOPICS: Contract Form: When a Record is Required
KEYWORDS: Bloom's: Application
70. Jane: "I'll pay you $50 if you will clean my windows."
Al: "I'll do it for $75."
Jane: "$65 and it's a deal."
Al: "No way."
Jane: "Too late. We have a contract."
Which of the following statements is true?
a. Jane is correct, there is a contract.
b. There is no contract.
c. There is a contract to clean the windows for $65.
d. There is a contract to clean the windows for $75.
ANSWER: b
POINTS: 1
DIFFICULTY: Challenging
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
STATE STANDARDS: United States - OH - AICPA: BB-Critical Thinking
TOPICS: Formation of Contracts
KEYWORDS: Bloom's: Application
ANSWER: a
POINTS: 1
DIFFICULTY: Challenging
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
STATE STANDARDS: United States - OH - AICPA: BB-Critical Thinking
TOPICS: Contract Form: When a Record is Required
KEYWORDS: Bloom's: Application
72. Abe and Gabriel entered into a contract for Abe to furnish landscaping services for Gabriel's office complex. The
contract provides the fee will be $75 per month. At the time Gabriel signs the agreement, the two discuss the fact
that the services required in the winter will be less and the fee will be reduced to $50 per month. Abe adds as
Gabriel is signing, "I just forgot to put that sliding scale in this contract. Don't worry - I'll take care of it because we
understand each other." Gabriel:
a. will be permitted to introduce evidence about the winter fee reduction.
b. will only need to pay $50 during the winter months.
c. will pay $75 per month every month because of parol evidence.
d. none of the above
ANSWER: c
POINTS: 1
DIFFICULTY: Challenging
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
STATE STANDARDS: United States - OH - AICPA: BB-Critical Thinking
TOPICS: Contract Form: When a Record is Required
KEYWORDS: Bloom's: Application
73. Andy: "This is to confirm our telephone conversation of earlier today. 200 lbs. of T-bone at $2.89 per pound."
Barb: "Yes, but that's 100 pounds at $2.99."
Andy: "Too late, we already reached agreement by phone."
Barb: "Too bad, it wasn't in writing."
Which of the following statements is true?
a. Barb is incorrect. The phone conversation was a contract.
b. Barb is correct. The agreement must be in writing to be enforceable.
c. Andy can enforce the agreement with the parol evidence rule.
d. none of the above
ANSWER: b
POINTS: 1
DIFFICULTY: Challenging
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
STATE STANDARDS: United States - OH - AICPA: BB-Critical Thinking
TOPICS: Contract Form: When a Record is Required
KEYWORDS: Bloom's: Application
74. Day 1: A wires an offer to B
Day 2: B receives the offer
Day 3: B phones an acceptance
A states, "Too late. I changed my mind."
Which of the following statements is true?
a. A and B do not have a contract
b. A and B have a contract under common law only
c. A and B have a contract
d. none of the above
ANSWER: d
POINTS: 1
DIFFICULTY: Challenging
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
STATE STANDARDS: United States - OH - AICPA: BB-Critical Thinking
TOPICS: Formation of Contracts
KEYWORDS: Bloom's: Application
ANSWER: b
POINTS: 1
DIFFICULTY: Challenging
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
STATE STANDARDS: United States - OH - AICPA: BB-Critical Thinking
TOPICS: Formation of Contracts
KEYWORDS: Bloom's: Application
76. Which of the following contracts would not be governed by the UCC?
a. a contract for dentures
b. a contract for the purchase of an Arabian horse
c. a contract for the purchase of an oil painting for $550
d. a contract for the purchase of an ATR jet
e. All of the above are governed by the UCC.
ANSWER: a
POINTS: 1
DIFFICULTY: Challenging
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
STATE STANDARDS: United States - OH - AICPA: BB-Critical Thinking
TOPICS: Sources of Contract Law
KEYWORDS: Bloom's: Application
ANSWER: c
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Payment Issues in International Contracts
KEYWORDS: Bloom's: Comprehension
78. John: "I will sell you my laptop computer for $330."
Mary: "Will you include the carrying case"?
John: "Sold."
a. There is a contract for the sale of the computer with the carrying case.
b. There is a contract for the sale of the computer but the carrying case is not included.
c. There is no contract for the sale of the laptop computer.
d. There is a contract but it is unenforceable because it must be in writing.
e. none of the above
ANSWER: c
POINTS: 1
DIFFICULTY: Challenging
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
STATE STANDARDS: United States - OH - AICPA: BB-Critical Thinking
TOPICS: Formation of Contracts
KEYWORDS: Bloom's: Application
79. Alpha Enterprises sent an offer to Omega Enterprises. The offer read as follows: AVAILABLE FOR
IMMEDIATE SHIPMENT: 600 WIRELESS NOKIA PHONES - MODEL HCG5321 (THE PHONE FROM
"CHARLIE'S ANGELS"). PRICE IS $10 EACH. 30 DAYS, SAME AS CASH. ALL WARRANTIES IN
EFFECT. THIS OFFER EXPIRES ON TUESDAY, MARCH 15, 2004. Omega sent the following letter in
response on March 14, 2002, via overnight delivery: HAPPY TO ACCEPT YOUR OFFER ON THE NOKIA
PHONES. SHIP IMMEDIATELY. There was a major snowstorm that hit the east coast on March 14, 2004, and
Omega's letter did not arrive at Alpha's headquarters until March 18, 2004. Alpha had sold the phones to another
company. Omega demanded the 600 phones for $10 each claiming that it had accepted the offer in time.
a. Omega is correct; it had valid and timely acceptance and had a contract.
b. Omega is incorrect; the acceptance must arrive for it to be effective.
c. Omega is incorrect; the offeree assumes the risk of the delivery means chosen.
d. Omega is correct, but any damages must be recovered from the overnight shipping company.
e. none of the above
ANSWER: a
POINTS: 1
DIFFICULTY: Challenging
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
STATE STANDARDS: United States - OH - AICPA: BB-Critical Thinking
TOPICS: Formation of Contracts
KEYWORDS: Bloom's: Application
ANSWER: a
POINTS: 1
DIFFICULTY: Challenging
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
STATE STANDARDS: United States - OH - AICPA: BB-Critical Thinking
TOPICS: Sources of Contract Law
KEYWORDS: Bloom's: Application
81. With respect to the facts in number 80, the newspaper ad:
a. is an offer.
b. is not an offer.
c. is a merchant's firm offer.
d. cannot be revoked.
e. none of the above
ANSWER: b
POINTS: 1
DIFFICULTY: Challenging
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
STATE STANDARDS: United States - OH - AICPA: BB-Critical Thinking
TOPICS: Offer
KEYWORDS: Bloom's: Application
ANSWER: b
POINTS: 1
DIFFICULTY: Challenging
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
STATE STANDARDS: United States - OH - AICPA: BB-Critical Thinking
TOPICS: Offer
KEYWORDS: Bloom's: Application
83. Which of the following eliminates the effect of the mailbox rule?
a. The UCC eliminates the mailbox rule.
b. Common law eliminates the mailbox rule.
c. An offer that includes, "Acceptance is effective upon receipt only."
d. Any attempt to eliminate the mailbox rule is void.
e. none of the above
ANSWER: c
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Acceptance: The Offeree's Response
KEYWORDS: Bloom's: Knowledge
84. Day 1 - School teacher sends superintendent letter of resignation.
Day 4 - Superintendent mails letter accepting resignation.
Day 5 - School teacher hand delivers letter withdrawing resignation.
Day 6 - Teacher receives superintendent’s letter.
a. The above negotiations are governed by the UCC.
b. The resignation was accepted and the withdrawal is too late.
c. both a and b
d. The resignation offer was revoked.
ANSWER: b
POINTS: 1
DIFFICULTY: Challenging
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
STATE STANDARDS: United States - OH - AICPA: BB-Critical Thinking
TOPICS: Formation of Contracts
KEYWORDS: Bloom's: Application
85. Buyer on fax: “Will take house for $587,500 if front lawn is fixed.”
Seller on fax in response: “Price is $589,000 and no front lawn.”
Buyer on fax in response: “$588,000 plus the front lawn.”
Seller on fax in response: $589,000 plus the front lawn.”
a. There is a contract for the sale of the house at $588,000 plus the lawn.
b. There is a contract for the sale of the house at $589,000 plus the lawn.
c. There is no contract.
d. none of the above
ANSWER: c
POINTS: 1
DIFFICULTY: Challenging
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
STATE STANDARDS: United States - OH - AICPA: BB-Critical Thinking
TOPICS: Formation of Contracts
KEYWORDS: Bloom's: Application
ANSWER: d
POINTS: 1
DIFFICULTY: Challenging
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
STATE STANDARDS: United States - OH - AICPA: BB-Critical Thinking
TOPICS: Sources of Contract Law
KEYWORDS: Bloom's: Application
87. Which of these can be a valid contract agreement under ESIGN?
a. A fax
b. A PDF file
c. An online click or check on an “I accept” button
d. All of the above
ANSWER: d
POINTS: 1
DIFFICULTY: Challenging
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
STATE STANDARDS: United States - OH - AICPA: BB-Critical Thinking
TOPICS: Writing and E-Commerce: The Uniform Electronic Transaction Act
KEYWORDS: Bloom's: Application
ANSWER: b
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Writing and E-Commerce: The Uniform Electronic Transaction Act
KEYWORDS: Bloom's: Knowledge
89. E-Sign:
a. applies only to interstate transactions.
b. must still be adopted by the states to be effective.
c. does not apply to contracts for the sale of goods.
d. applies in all 50 states.
e. none of the above
ANSWER: d
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Writing and E-Commerce: The Uniform Electronic Transaction Act
KEYWORDS: Bloom's: Knowledge
90. The Uniform Electronic Transaction Act (UETA):
a. has been adopted in all 50 states.
b. has been declared unconstitutional.
c. is the same as E-sign.
d. none of the above
ANSWER: d
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Writing and E-Commerce: The Uniform Electronic Transaction Act
KEYWORDS: Bloom's: Knowledge
91. The following exchange took place in a series of e-mails between Mitchell Raines and Leslie Carroll:
Mitchell: I am looking at the Trek bike advertised on your website for $650.00. Would you take $600.00?
Leslie: I would take $600 if there were no delivery required.
Mitchell: Well, I have to have it delivered because you are two states away.
Leslie: Well, then if there has to be delivery, I could do it for $630.00.
Mitchell: Is that cash?
Leslie: Yes.
a. Mitchell and Leslie have a contract for the sale and purchase of the bike for $630.00 with delivery.
b. Mitchell and Leslie have a contract for the sale and purchase of the bike for $630.00 without delivery.
c. Mitchell and Leslie have an offer on the table of $600 with no delivery.
d. Mitchell and Leslie do not have a contract.
ANSWER: d
POINTS: 1
DIFFICULTY: Challenging
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
STATE STANDARDS: United States - OH - AICPA: BB-Critical Thinking
TOPICS: Formation of Contracts
KEYWORDS: Bloom's: Application
92. Julia Pitt runs a boutique that specializes in luggage and travel items. Julia contacts Tumi luggage about carrying its
line of messenger satchels. The Tumi representative tells Julia that Tumi would be happy to sell her 100 Tumi Black
Messenger bags for $318 each. Julia is happy with the price and asks Tumi to send the bags. The Tumi
representative then faxes a confirmation of the shipment of the 100 bags at $318 each. Julia receives the fax.
When the bags arrive, Julia contacts Tumi and says there is a business downturn and that she does not want the
bags and that there was no contract anyway.
a. Julia is correct; the contract requires some type of authentication from Julia to be enforceable.
b. Julia is correct; the contract required more than a fax to have a sufficient record.
c. Julia is incorrect; she and Tumi have a valid and enforceable contract.
d. both a and b
ANSWER: c
POINTS: 1
DIFFICULTY: Challenging
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
STATE STANDARDS: United States - OH - AICPA: BB-Critical Thinking
TOPICS: Formation of Contracts
KEYWORDS: Bloom's: Application
93. Fred Twain sends the following e-mail to Ralph Barnes: “Will sell you my 2006 Audi A4 for $23,500, will carry or
take cash. This offer to remain open until November 11, 2007.” Ralph responds, “I know how much you love that
car. I’ll think about it.” On November 12, 2007, Ralph e-mails Fred and writes, “Fred, I am ready to buy your car.”
Fred responds, “Ralph, I sold the car this morning because I didn’t hear from you.”
a. Fred has breached a contract because Ralph accepted.
b. Fred was required to notify Ralph before he sold the car to someone else.
c. Ralph no longer had the power of acceptance.
d. both a and b
ANSWER: c
POINTS: 1
DIFFICULTY: Challenging
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
STATE STANDARDS: United States - OH - AICPA: BB-Critical Thinking
TOPICS: Formation of Contracts
KEYWORDS: Bloom's: Application
94. On Monday, Sam's Computer Company wires Bob's Computer Mart, "I have two IBM XT's for sale for $1700
each. You pay cost of shipping." Bob received the offer on Monday afternoon and wired back, "You have a deal.
30 days same as cash." On Tuesday morning Sam called to revoke the offer. On Tuesday afternoon Sam received
the wire. Sam says there is no contract and Bob says there is. Who is correct?
ANSWER: Mailbox rule applies. There was a contract on Monday afternoon when the wire was
sent. Between the two merchants, the "30 days" additional terms will become part of
the contract.
POINTS: 1
DIFFICULTY: Challenging
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
STATE STANDARDS: United States - OH - AICPA: BB-Critical Thinking
TOPICS: Formation of Contracts
KEYWORDS: Bloom's: Application
ANSWER: UCC - goods $500 or more; real estate; promises to pay the debt of another; contracts
that cannot be performed in one year.
POINTS: 1
DIFFICULTY: Challenging
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
STATE STANDARDS: United States - OH - AICPA: BB-Critical Thinking
TOPICS: Contract Form: When a Record is Required
KEYWORDS: Bloom's: Application
96. H2O Plumbing has been working on a residential subdivision project for Paradise Builders. H2O agreed to do all
plumbing work on each of the houses for a fee of $5200 per house. H2O has reviewed the market and decided that
most plumbers are getting between $5500 and $6000 for houses of comparable size. H2O has done the initial work
on all of the houses and has told Paradise it will stop work unless the price is increased to $5500 per house.
Paradise is on a tight schedule with its construction lender and with home buyers and succumbs to the demand.
Later, when the houses are constructed, Paradise refuses to pay any more than $5200 per house. Explain H2O's
rights to them.
ANSWER: H2O cannot get more money for what it was already obligated to do - it could only get
$5500 if it agreed to do more on each house. Further, H2O used duress to get
Paradise to agree to the transaction. There are at least two contract defenses - lack of
consideration and duress - that could be used by Paradise.
POINTS: 1
DIFFICULTY: Challenging
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
STATE STANDARDS: United States - OH - AICPA: BB-Critical Thinking
TOPICS: Consideration
KEYWORDS: Bloom's: Application
97. Trevor Jones accepted a summer internship with Hailey & Thomas, a management consulting firm. The
negotiations and offer were all oral. Hailey & Thomas' managing partner did send a letter with the following
language:
Welcome to Hailey & Thomas. We are looking forward to working with you. When you arrive in New York,
please call me so that we may help you locate lodging for the summer.
Discuss whether Trevor has a contract and if he has sufficient proof of its existence. Also discuss whether the
agreement needed to be in writing.
ANSWER: The agreement did not need to be in writing since it was a contract for less than one
year. Even if the contract did need to be in writing, Trevor probably has sufficient
evidence with the letter from the managing partner.
POINTS: 1
DIFFICULTY: Challenging
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
STATE STANDARDS: United States - OH - AICPA: BB-Critical Thinking
TOPICS: Contract Form: When a Record is Required
KEYWORDS: Bloom's: Application
98. Barnes & Noble faxes to Woodchip Publishing Company on May 1, 2002 the following:
Please ship immediately six copies of NOBODY FIXES REAL CARROT STICKS ANYMORE.
Is there a contract?
ANSWER: Yes, under the UCC, the shipment was acceptance. Woodchip gave a break on
shipping which it is free to do.
POINTS: 1
DIFFICULTY: Challenging
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
STATE STANDARDS: United States - OH - AICPA: BB-Critical Thinking
TOPICS: Acceptance: The Offeree's Response
KEYWORDS: Bloom's: Application
99. In #98 above, suppose that the fax from Barnes & Noble read:
Please ship immediately via priority mail - 10 Copies of NOBODY FIXES REAL CARROT STICKS
ANYMORE.
Woodchip ships the books at the $6 price but ships them via two-day UPS at a price of $5.95. Is there a contract?
ANSWER: You have two merchants and Woodchip accepted by shipping, but used a different
carrier that made a difference in price. It was an acceptance and breach at the same
time because Barnes & Noble specified shipping and Woodchip used a different
means for shipment. At a minimum, Barnes & Noble is permitted to not pay the extra
shipping even if it chooses to accept the books. The acceptance on the different
shipping terms is really not an acceptance, but a counteroffer that Barnes & Noble is
free to accept or reject.
POINTS: 1
DIFFICULTY: Challenging
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
STATE STANDARDS: United States - OH - AICPA: BB-Critical Thinking
TOPICS: Acceptance: The Offeree's Response
KEYWORDS: Bloom's: Application
ANSWER: E-sign - The Electronic Signatures in Global and National Commerce Act
Uniform Electronic Transactions Act (UETA)
Uniform Computer Information Transactions Act
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Writing and E-Commerce: The Uniform Electronic Transaction Act
KEYWORDS: Bloom's: Knowledge
101. Discuss whether a contract to solicit names of potential subscribers using pop-up Internet ads for a newspaper is
considered goods or services under the UCC.
ANSWER: According to Wall Street Network, Ltd. v. New York Times Company, such a list of
names is a service under the UCC and not a good. While the end result is a list of
names - potential subscribers - the process of obtaining those names is a service. The
essence of the contract calls for services not the sale of goods.
POINTS: 1
DIFFICULTY: Challenging
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
STATE STANDARDS: United States - OH - AICPA: BB-Critical Thinking
TOPICS: Sources of Contract Law
KEYWORDS: Bloom's: Application
102. The Equal Credit Opportunity Act was passed to ensure equal credit opportunity regardless of past credit history.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Consumer Credit Contracts
KEYWORDS: Bloom's: Knowledge
103. A negative credit decision cannot be based on an applicant's plans for having children.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Consumer Credit Contracts
KEYWORDS: Bloom's: Knowledge
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Consumer Credit Contracts
KEYWORDS: Bloom's: Knowledge
105. The solicitation of credit card customers is not regulated by the federal government.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Consumer Credit Contracts
KEYWORDS: Bloom's: Knowledge
106. The liability limitation for credit card holders who report a loss or theft is $50.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Controlling Credit Card Contracts
KEYWORDS: Bloom's: Knowledge
107. A credit card applicant can be solicited without disclosure of the card's terms.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Controlling Credit Card Contracts
KEYWORDS: Bloom's: Knowledge
108. Under CARD, credit terms must last for at least two years.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Controlling Credit Card Contracts
KEYWORDS: Bloom's: Knowledge
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Consumer Credit Contracts
KEYWORDS: Bloom's: Knowledge
110. The Equal Credit Opportunity Act applies only to consumer transactions.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Discrimination in Credit Contracts
KEYWORDS: Bloom's: Knowledge
111. A spouse cannot apply for credit without the signature of his/her spouse.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Discrimination in Credit Contracts
KEYWORDS: Bloom's: Knowledge
112. Asking a couple's plans for having children is a violation of the ECOA.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Discrimination in Credit Contracts
KEYWORDS: Bloom's: Knowledge
113. Requiring credit references for members of one race but not for another is a violation of the ECOA.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Discrimination in Credit Contracts
KEYWORDS: Bloom's: Knowledge
114. Asking that all sources of income be revealed on a credit application is prohibited by the ECOA.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Discrimination in Credit Contracts
KEYWORDS: Bloom's: Knowledge
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Credit Disclosures
KEYWORDS: Bloom's: Knowledge
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Subprime or Predatory Lending
KEYWORDS: Bloom's: Knowledge
117. Predatory lending involves high interest rates and title loans.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Subprime or Predatory Lending
KEYWORDS: Bloom's: Knowledge
118. The Fair Credit and Charge Card Disclosure Act prohibits issuing credit cards without the consumer’s consent.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Controlling Credit Card Contracts
KEYWORDS: Bloom's: Knowledge
119. The subprime lending market is also called the predatory lending market.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Subprime or Predatory Lending
KEYWORDS: Bloom's: Knowledge
120. Many states have imposed additional steps for making loans in the subprime lending market.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Subprime or Predatory Lending
KEYWORDS: Bloom's: Knowledge
121. The subprime lending market collapse in 2007 led to other credit crunches and business impacts.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Subprime or Predatory Lending
KEYWORDS: Bloom's: Knowledge
122. An applicant for credit need not disclose spousal support income if he is not relying on it as an income source.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Discrimination in Credit Contracts
KEYWORDS: Bloom's: Knowledge
123. The spouse of a credit applicant must disclose his or her credit information if the credit application is for the
applicant’s business operations.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Discrimination in Credit Contracts
KEYWORDS: Bloom's: Knowledge
124. A credit application that asks for criminal convictions from the last five years violates the ECOA.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Discrimination in Credit Contracts
KEYWORDS: Bloom's: Knowledge
125. The Equal Credit Opportunity Act prohibits which of the following?
a. Basing the credit decision on the receipt of public assistance income.
b. Basing the credit decision on a bankruptcy of five years ago.
c. Basing the credit decision on the fact that the applicant was in prison for a felony three years ago.
d. Basing the credit decision on unemployment.
ANSWER: a
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Diversity
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Discrimination in Credit Contracts
KEYWORDS: Bloom's: Application
126. Which of the following questions on a credit application would be a violation of ECOA?
a. asking about felony convictions
b. asking address and length of residence
c. asking whether the applicant is pregnant
d. All of the above are violations.
ANSWER: c
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Diversity
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Discrimination in Credit Contracts
KEYWORDS: Bloom's: Application
127. The maximum liability for a credit card holder whose card is lost or stolen is:
a. $50.
b. $50 if the cardholder notifies the creditor.
c. $0.
d. none of the above
ANSWER: b
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Controlling Credit Card Contracts
KEYWORDS: Bloom's: Knowledge
128. Which of the following is not required to be disclosed in the solicitation of a credit card customer?
a. fees for issuing the card
b. what your credit limit will be
c. APR for the card
d. All of the above must be disclosed.
ANSWER: b
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Controlling Credit Card Contracts
KEYWORDS: Bloom's: Knowledge
129. Assume there is a credit contract for the purchase of the following items. Which one is not covered by TILA
disclosures?
a. a microwave for use in a CPA office
b. a computer for a home
c. a car by an employee that the employee will use to travel to sales calls
d. All of the above are covered.
ANSWER: a
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Consumer Credit Contracts
KEYWORDS: Bloom's: Application
130. Janet Kennedy has received a letter in the mail from BISA International, a credit card firm. The letter describes the
card as follows:
"This card is yours for only a small annual fee that is billed to your account. There is an annual percentage rate
finance charge of 16.5%. There may be other charges for some transactions. There are no late fees, but there will
be a charge for going over your credit limit."
ANSWER: c
POINTS: 1
DIFFICULTY: Challenging
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
STATE STANDARDS: United States - OH - AICPA: BB-Critical Thinking
TOPICS: Controlling Credit Card Contracts
KEYWORDS: Bloom's: Analysis
131. Which of the following questions on a credit application violates the ECOA?
a. "List your place of employment."
b. "Other sources of income - if you wish to have them considered in your credit evaluation."
c. "Length of time in current residence."
d. "Monthly child support income."
ANSWER: d
POINTS: 1
DIFFICULTY: Challenging
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
STATE STANDARDS: United States - OH - AICPA: BB-Critical Thinking
TOPICS: Discrimination in Credit Contracts
KEYWORDS: Bloom's: Analysis
132. Under CARD, the terms of the credit card must be:
a. sent to the customers.
b. printed on paper.
c. posted on the Internet.
d. all of the above.
ANSWER: d
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Controlling Credit Card Contracts
KEYWORDS: Bloom's: Comprehension
133. Stan James carelessly left his wallet in the restroom of a gas station while on a business trip. He did not realize his
wallet was gone until eight hours later when he went to check into his hotel. Stan called the credit card companies
immediately, only to learn that the thief had charged $2000 on his American Express card, $450 on his MasterCard,
and $75 on his gas credit card. Stan James' maximum liability on the cards is:
a. $0.
b. $50 per card.
c. $50.
d. none of the above
ANSWER: b
POINTS: 1
DIFFICULTY: Challenging
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
STATE STANDARDS: United States - OH - AICPA: BB-Critical Thinking
TOPICS: Controlling Credit Card Contracts
KEYWORDS: Bloom's: Application
ANSWER: d
POINTS: 1
DIFFICULTY: Challenging
NATIONAL STANDARDS: United States - BUSPROG: Diversity
STATE STANDARDS: United States - OH - AICPA: BB-Critical Thinking
TOPICS: Discrimination in Credit Contracts
KEYWORDS: Bloom's: Application
135. Which of the following is not a violation of the ECOA?
a. requiring a husband's signature when his wife applies for a credit card
b. requiring disclosure of pregnancy
c. requiring disclosure of length of time at current job
d. requiring disclosure of marital status
e. All of the above are violations of the ECOA.
ANSWER: c
POINTS: 1
DIFFICULTY: Challenging
NATIONAL STANDARDS: United States - BUSPROG: Diversity
STATE STANDARDS: United States - OH - AICPA: BB-Critical Thinking
TOPICS: Discrimination in Credit Contracts
KEYWORDS: Bloom's: Application
136. Which of the following question(s) on a credit application would be a violation of the Equal Credit Opportunity Act?
a. “Do you plan on getting pregnant within the next two years?”
b. “Have you ever declared bankruptcy?”
c. “Have you ever been convicted of a crime?”
d. All of the above are violations.
ANSWER: a
POINTS: 1
DIFFICULTY: Challenging
NATIONAL STANDARDS: United States - BUSPROG: Diversity
STATE STANDARDS: United States - OH - AICPA: BB-Critical Thinking
TOPICS: Discrimination in Credit Contracts
KEYWORDS: Bloom's: Application
ANSWER: d
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Controlling Credit Card Contracts
KEYWORDS: Bloom's: Comprehension
138. List the federal laws regulating credit contracts and give a brief description of each.
ANSWER: ECOA - prohibits race, color, sex, and national origin from being used as the basis for
a decision. TILA - full disclosure provisions of Consumer Credit Protection Act. Fair
Credit Billing Act - regular disclosures; full disclosures of open-end credit. FCRA -
disclosure of reports and right to correct. Consumer Leasing Act - disclosure in
leasing goods. FDCPA - regulates collection tactics.
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Consumer Credit Contracts
KEYWORDS: Bloom's: Comprehension
139. Discuss what colleges and universities must do under CARD for their students.
ANSWER: CARD requires the schools to limit the locations of solicitation of credit cards for
students, to disclose all financial relationships with the credit card companies, and to
provide debt counseling for students. These items will help protect and educate the
students about the uses and misuses of credit cards.
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Credit Disclosures
KEYWORDS: Bloom's: Knowledge
140. What additional disclosures must be made in credit transactions in which the debtor's home will serve as security
for the loan?
ANSWER: Under the amendments to TILA covering home mortgages, the loan documents must
make clear the fact that default could lead to foreclosure and loss of the home.
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Credit Disclosures
KEYWORDS: Bloom's: Knowledge
141. Using what you have learned about consumer credit, develop a credit application that would comply with all federal
statutes and regulations.
ANSWER: Cannot ask for extra sources of income unless the consumer wants to reveal them.
Cannot ask about marriage, pregnancy, welfare income. Cannot discriminate on the
basis of race, gender, national origin.
POINTS: 1
DIFFICULTY: Challenging
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
STATE STANDARDS: United States - OH - AICPA: BB-Critical Thinking
TOPICS: Consumer Credit Contracts
KEYWORDS: Bloom's: Synthesis
142. Which of the following contracts would have to have some form or writing or record to be enforced?
a. A contract for the sale of a painting for $1,000.
b. A contract for employment for nine months.
c. A contract for advertising a house for sale for $50.
d. All of the above contracts would need to be in writing to be enforceable.
ANSWER: a
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Contract Form: When a Record is Required
KEYWORDS: Bloom's: Application
Evaluate the following facts and then answer the next two questions.
Day 1 S sends a letter to B with the following: “I will sell you my Play Station 3 for $150 when I get my new
Play Station.”
Day 2 B receives the letter and responds, “I will take the Play Station for $150.”
ANSWER: False
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Critical Thinking
TOPICS: Offer
KEYWORDS: Bloom's: Application
144. The communication between S and B must be evidenced by a record if any rights related to the exchange can be
enforced.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Critical Thinking
TOPICS: Offer
KEYWORDS: Bloom's: Application
Evaluate the following facts and then answer the next two questions.
Day 1 S sends a letter to B with the following: “I will sell you my Play Station 3 for $150.”
Day 2 B receives the letter and responds, “I will take the Play Station for $150, but include 3 games.”
ANSWER: True
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Critical Thinking
TOPICS: Offer
KEYWORDS: Bloom's: Application
ANSWER: False
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Critical Thinking
TOPICS: Formation of Contracts
KEYWORDS: Bloom's: Application
Evaluate the following facts and then answer the next two questions.
Day 1 S sends a letter to B with the following: “I will sell you my Play Station 3 for $150.”
Day 2 B receives the letter and responds by sending a letter with the following, “I will take the Play Station for
$150.”
Day 2 After B sends the letter, S sends an e-mail to B that reads, “Forget it. I sold the Play Station to someone
else.”
ANSWER: True
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Critical Thinking
TOPICS: Offer
KEYWORDS: Bloom's: Application
ANSWER: False
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Critical Thinking
TOPICS: Formation of Contracts
KEYWORDS: Bloom's: Application
149. Which of the following is not part of the CARD provisions on transfer of credit card balances?
a. Limits on how quickly credit terms can be changed following the transfer.
b. Additional disclosures on transfer fees.
c. Limits on transfer fees.
d. Prohibitions on additional transfers by the card holder.
ANSWER: d
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Critical Thinking
TOPICS: Credit Disclosures
KEYWORDS: Bloom's: Application
150. Stamps.com offers at-home postage and mailing for a monthly fee. Customers are able to carry a balance on their
accounts that allows them to mail packages and letters as long as there is a balance in their account. Stamps.com
has a button on its program that carries this logo, “To purchase postage, click here.” Following that click, another
window pops up that reads, “You are about to purchase postage. Once you click 'Okay' below, you cannot change
this transaction." Why does Stamps.com have the second pop-up button?
a. The pop-up button is simply a courtesy for its customers.
b. The pop-up button is necessary to show acceptance of the terms.
c. The pop-up button is required under the UCC.
d. The pop-up button is required under common law.
ANSWER: b
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Critical Thinking
TOPICS: Writing and E-Commerce: The Uniform Electronic Transaction Act
KEYWORDS: Bloom's: Application
151. A bilateral contract is one in which one side promises to perform in exchange for the other side's actions.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Types of Contracts
KEYWORDS: Bloom's: Knowledge
152. Void and voidable contracts are one and the same.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
NATIONAL STANDARDS: United States - BUSPROG: Analytic
STATE STANDARDS: United States - OH - AICPA: BB-Legal
TOPICS: Types of Contracts
KEYWORDS: Bloom's: Knowledge